We had a great turnout on Thursday morning for the Lending for the Private Rented Sector (PRS) seminar at our London offices. We had over 60 external attendees, with clients from RBS, Savills, Barclays, Capita Asset Services, Lloyds Banking Group, and Wells Fargo. Presenters included Francisca Sepulveda of Reed Smith, George Cotterell of Venn Partners, Gareth Blacker of the Homes and Communities Agency (HCA), Sharon Quinlan of Barclays, and Tom Stenhouse of Patrizia UK.
Discussion centred on the healthy interest in the PRS market from established developers as well as new entrants to the market; with some commercial developers showing interest in this sector. It was discussed how lenders do remain cautious due to scarce historic information available to fully understand the risks; particularly in the transition phase between PC and a site being fully or near-fully let. In addition, the length of development time for a PRS scheme is a barrier to a number of lenders in the market. To combat these risks, quality sites, developers and investors with a track record are crucial.
HCA spoke about how they provide a flexible package of assistance for infrastructure development; ranging from the letter of comfort scheme, operated by Venn Partners, to providing mezzanine and infrastructure finance. It was noted that HCA mezzanine finance is not intended to compete against the mezzanine lenders in the market, but rather assist where the mezzanine slice would not reach a high enough yield (among other factors). Once fully or near-fully let, a PRS facility operates in the same way as the other residential deals that lenders have been acquainted with for some time.
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