Voltaire Financial | Property Finance

What is Super Bridging?

11/02/2014 | by Andrew Hosford

Andrew Hosford - Head of Bridging, Voltaire BridgingVoltaire Bridging Definition: 'A short-term loan where the lender's primary scrutiny is focused upon the underlying real estate asset and where the lender is secured via a first legal charge against the property but where the quantum of the loan advance exceeds £50m'.

Voltaire Bridging was launched last year to offer a dedicated bridging capability to our customers and the wider market and so far we have been impressed with the uptake from borrowers, introducers and lenders alike. Deal flow is even higher than expected and we look forward to assisting with a large volume of requirements during 2014.

From what I am seeing in the press, and often being asked to comment on by journalists, increased average deal sizes are inevitable. 'Super Bridging' is a term that I have heard being thrown around since the middle of last year and it certainly does not seem to be going away – in fact it seems set to become an important product in its own right. The market saw a very large and high profile loan of over £62m towards the end of 2013 and now the bar has been raised by another bridging lender funding a residential purchase with a loan of over £127m. For many the thought of a true bridge being required for a deal of this size is startling, however, there are good reasons for this and I would expect to see a larger number of such bridges during 2014.

Bridging is designed to be flexible and with lenders releasing new products with increasing regularity the variety of types of bridging deals being placed is growing. It is no surprise then that one of these changes is funding size. We see a lot of deals at Voltaire Bridging where the client is purchasing a new property and has to move quickly, effectively acting like a cash buyer, to beat a foreign investor who is extremely cash rich. This is a typical bridging use of course, but when you apply this to the prime and super prime London acquisitions obviously the purchase price increases and the requirement for a super bridge is more likely. Having strong relationships with funding sources that can offer bridging loans of over £100m is rare and facilitates opportunities for our clients to move quickly to secure large, central London properties.

What sets Voltaire Bridging apart is our breadth of relationships with funding sources. Alongside the mainstream bridging lenders we are also able to source short term finance from more traditional lenders as well as funds. Indeed I would not be surprised to see more banks and funds starting to offer shorter terms and to offer them more swiftly. As an example I was approached by a large German bank relationship just before the end of 2013 to inform me that they would now consider bridging deals and that their minimum would be £150m. If they are able to perform quickly, stick to the indicated terms and incorporate an element of flexibility then I can see this step into bridging being a success for them.

I will be at the MIPIM real estate conference in Cannes next month. I will be very interested to see the extent to which 'Super Bridging' requirements are discussed. It will also be interesting to get an up to date feel for how the rest of the property industry currently perceives bridging and its reputation which has improved out of recognition over the last 3 to 4 years. Certainly the Candys, amongst others, have been banging the bridging drum at MIPIM for a few years and there will certainly be a large number of property professionals who are set to learn about the pros and cons of the 'Super Bridge'. As more and more people become exposed to the uses and flexibility of bridging the incredible figures for 2013 are surely set to rise further in 2014 and we are very excited to be a part of it.

 

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