Commercial Finance Specialists

Property development in London has received a boost as property fund managers Cordea Savills announced the launch of their Prime London Residential Development Fund.

The fund is designed to capitalise on the 'funding gap' left by banks and traditional lenders who have gradually moved away from residential and commercial property. The shortage in the availability of finance has left developers unable to secure bridging loans or other forms of debt to carry schemes through to completion.

The fund will provide finance primarily through development equity funding in joint ventures with preferred partners as well as by providing 'mezzanine' finance.

It will seek opportunities for property development in London, where residential property continues to perform strongly. Prime London residential property is predicted to deliver 9% growth per year to 2016, showing London to remain a safe haven for both domestic and international investors. Strong demand and favourable economic and geographical factors have maintained the strong market conditions for residential property.

Director of Investment, Patrick Carr, commented: "This proposition is one of the most compelling in the property sector at the present time. It provides the opportunity to capitalize on the current development funding gap as well as benefitting from the strong capital growth forecast in the prime London residential market during the life of the Fund."

Parent company, Savills, is amongst the largest advisers on such residential schemes, with multiple specialist teams in place. Shares in Savills closed yesterday at 310.3p, up from 305p on Friday, and up 16% from 267.7p the previous week.

By Hadji Singh