Pallas Capital has provided an £8.4m bridging finance facility on a Grade A office building and car park in Aberdeen, completing the 12-month loan within a one-month timeframe.
The 60,000 sq ft property, a refurbished granite warehouse that underwent a £16.5m redevelopment following its 2015 acquisition, was refinanced at 70% loan-to-value while the borrower arranged longer-term commercial debt.
Timeline pressures drive alternative finance
The facility was arranged after traditional lenders were unable to meet the borrower’s completion deadline. Anna Thompson, bridging originator at Pallas Capital, led the transaction through commercial valuation and legal processes to meet the tight timeframe.
The bridging finance sector has seen increased activity as property owners navigate interest rate uncertainty and refinancing deadlines. Such short-term facilities typically serve as interim solutions while borrowers secure conventional bank financing.
Asset strength underpins lending decision
Pallas Capital’s underwriting focused on the property’s market value rather than vacant possession value, supported by the building’s tenancy structure. All leases contain no break clauses and extend beyond the loan term, with quarterly rental income covering loan servicing costs.
“This transaction shows how flexible bridging finance can step in to provide stability when traditional banking timelines put institutional-grade commercial assets under pressure,” Thompson said. “Our primary focus was maintaining absolute continuity for the building’s established tenants, ensuring their day-to-day operations remained completely undisturbed.”
The deal was brokered by Raj Vilkhou, director of Express Financial Services. The transaction represents Pallas Capital’s continued activity in the Scottish commercial property market, where tenant stability and compliance remain key considerations for lenders.
Bridging finance facilities typically range from one month to two years, with interest rates reflecting the short-term nature and speed of completion. The Aberdeen property’s strong covenant strength and lease profile enabled the lender to structure the facility on market value terms.