Principality's commercial team leaps pounds 750m barrier; Latest deal in Swansea SA1 development.
PRINCIPALITY'S commercial lending division has broken through the pounds 750m barrier for the first time with a high-profile multi-million-pound deal in Swansea's SA1 development.
The pounds 7.5m Ethos Project will be a high-specification office block aimed primarily at businesses that have successfully outgrown the Swansea Technium buildings.
The 38,000 sq ft building, funded by Principality and with grant support from the Welsh Assembly Government, is due for completion in May 2008.
The Ethos Project deal is the second major SA1 development. It follows the transformation of the J-Shed - a former grainhouse - into New York-style apartments.
The building society's commercial lending division has experienced considerable growth since its launch five years ago.
The 18-strong team, based in Cardiff, specialises in investment and development funding for both residential and commercial schemes. It lends not only within Wales but also along the M4 corridor and in the Midlands.
Its first major deal involved the Brewery Quarter development in Cardiff's city centre.
A regional office in Swansea, led by John Picton, considers the latest SA1 deal a 'significant milestone'. It comes on its second birthday.
Peter Hughes, head of commercial lending at Principality, said, 'We are thrilled with our achievements. Whilst Principality has historically been associated with residential lending, by demonstrating our competence and flexibility in the commercial property market, we have become the first port of call for many South Wales developers and investors.
'With growing confidence and scale behind the team, the type of deals that can be accommodated have become larger, more varied and at times more complex.
'We are one of a few building societies that undertake development funding and with short lines of communication, the team is able to respond quickly to our clients' needs in providing flexible, competitive funding.'
The division has built up a strong presence among Wales' housing associations, where the lending book has passed the pounds 100m landmark. The division played its part as one of the funding partners in the first stock transfer at Bridgend of some 6,500 homes for Valleys to Coast Housing Association.
It has also extended its lending facility by pounds 10m for Pembrokeshire Housing Association to assist with the delivery of affordable quality homes in the area and United Welsh Housing Association has agreed a new loan facility of pounds 10m to fund its development programme over the next three years.
Mr Hughes said, 'The success of the division is down to the people who work in the team who have forged strong relationships with our client base which, whilst predominantly in South Wales and the M4 corridor, is now expanding and has a much more credible reach, with over 50% of the lending book based in England. We are certainly punching our weight effectively against both local and national competition.'
Last year Principality opened a Birmingham office, which has extended the division into the Midlands, Yorkshire and North West England. This office, led by Derek Wells, focuses on development funding with established regional developers such as the Chase Group. Funding ranges from 70-100% of total project cost.
Peter Griffiths, chief executive of Principality Building Society, added, 'Increasingly, the team's credentials are acknowledged by a much wider audience...
'Looking forward, the market has been conducive to commercial lending in recent years. However, the challenges for us are to continue to innovate, to remain true to the characteristics which have been at the heart of our success.'
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|Publication:||Western Mail (Cardiff, Wales)|
|Date:||Apr 2, 2007|
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