Demand for residential and commercial funding is fuelling investment levels in property development by the Development Bank of Wales.
The Development Bank reported loans totaling £48.8 million for 37 property development investments in the year ending 31 March 2021. This represents an increase of 43% compared to the previous year with support provided for 402 new homes and 70,892sqft of commercial space.
Led by director Cenydd Rowlands, the team of specialist property investment executives has recently expanded from 14 to 18 across Wales with the appointment of four new property investment executives to respond to the increase in demand for funding. Cenydd chats to Business News Wales about the news here:
“The areas of property development we invest in, namely the new build residential and commercial development markets, have performed extremely well in the last two years. We’ve seen a lot of demand from developers in these areas and are encouraged that this demand is continuing.”
Recent deals have included a seven-figure property development loan to help Abbey Construction build 10 three-bedroom, semi-detached homes in Churchstoke, Montgomeryshire.
Jason Price, Director of Abbey Construction, said:
“The loan from the Development Bank of Wales property team helped kick start our high-quality Ridgeway View development. We are delighted to have already secured buyers for all of the homes – the majority through the Help to Buy – Wales scheme. We’re passionate about providing much needed accommodation, built to our exacting standards, in the area and look forward to an on-going partnership with the Development Bank.”
In Rumney, Cardiff, Propco Developments Limited has completed the second phase of Waterside Business Park with all eight units now fully let or sold.
Part-funded by a six-figure loan from the Development Bank, phase two is a £1.5 million site that includes eight industrial units. Six have been sold to occupiers that include Richard Kemble Ceilings, Puma Floors and Absolute Performance with two units having been let on
“From one-off single residential builds to larger developers like Lewis Homes and more complex developments with listed buildings like Woodlands House in Malpas, we are maximising our support for the property sector across Wales.
“The combination of our exit from the European Union and the economic impact of Covid-19 means that developers are facing unprecedented challenges with their supply chains and material costs. Our specialist team understands these challenges and is able to work with developers to create a tailored approach with flexibility to offer longer terms if needed. Importantly, our funds can go further because all the money received from our investments can be reinvested into more property schemes. This increases our impact without the need for additional funds.
“Demand for new, good quality commercial premises is definitely on the rise in Wales which has created an opportunity for small, local developers and we continue to offer support through our dedicated development funds. Be it residential or commercial, we’re here and ready to do the deals that developers need to get their projects over the line.”
The Development Bank of Wales invests in residential, mixed use and commercial developments through the Wales Property Fund, Wales Commercial Property Fund and the Stalled Sites Fund. These schemes, funded by the Welsh Government, are recyclable and the money received is reinvested. Loans from £150,000 to £5 million are available for small and medium-sized developers based in Wales, working on residential, mixed-use and commercial development projects in Wales.