Case Study · United Kingdom

HNWI from UAE Purchases Large Commercial Building at Discount

10 January 2023

HNWI from UAE Purchases Large Commercial Building at Discount

UAE-based High Net Worth Individual invests in discounted commercial building in Manchester, UK – a smart move for savvy investors seeking prime real estate opportunities in a bustling city with growth potential.

The HNWI, who had been actively searching for investment opportunities, came across a large commercial building that was up for sale. The building, located in a prime location, was originally priced high but due to market conditions, the price was reduced to a discounted rate. The HNWI saw this as a great opportunity and made the purchase. The acquisition was a strategic move for the HNWI as the commercial building is expected to generate a significant return on investment. The HNWI was pleased with the purchase and is confident in the long-term success of the investment.

Related: Read about when Rikvin Capital enabled a shipping tycoon purchase prime Central London Real Estate

  • Location: Manchester, UK
  • Market Value: £40,000,000.00
  • Loan Amount: £7,336,343.00
  • Loan-to-Value: 18%
  • Duration of Loan: 12 Months
  • Payment Schedule: 8 Months Deducted in Advance
  • Asset Type: Commercial Property
  • Completion Time: 1 Month

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FAQ

I am a UAE-based HNWI and have found a discounted UK commercial deal. Can you fund it?

Yes. The Manchester case here lent £7.34 million against a £40 million commercial building (18% loan-to-value) for a UAE-based HNWI buying at a discount. Cross-border HNWI commercial purchases are a core deal type, and the low loan-to-value reflected the buyer's preference to use the loan for speed rather than maximum borrowing.

How much can I borrow against a UK commercial building bought at a discount?

Up to around 65 to 70% of the lower of purchase price or independent valuation. The Manchester deal closed at 18%, well below maximum, which suited a buyer with substantial cash who wanted to keep most of the price unencumbered. Higher loan-to-value is available on request.

What does "8 months deducted in advance" mean?

It means 8 months of interest is taken out of the loan principal at drawdown, with no monthly payments during that period. The Manchester borrower received the net amount and had no monthly servicing obligation, which suited an overseas borrower who preferred a single set-up rather than a UK monthly payment from abroad.