How the Conversion of an Old Shoe Factory Came Together

Paul Watson is the Head of Origination at Blend Network. In this article, he discusses how an old shoe factory was successfully converted amid lockdowns and the COVID-19 pandemic.

COVID-19 brought enormous challenges for many property developers who had to face the closure of their building sites for weeks, delays in supply chains aggravated by Brexit and uncertainty over the outlook of the housing market. In this article, I share the details of how the conversion of an old shoe factory came together amid an unprecedented year of lockdowns and pandemics.

We are all too familiar with the challenges that most companies and individuals have had to face as a result of COVID-19. So, I will focus on a more positive story and wanted to share with you the details of a landmark property development project successfully carried out in the shadow of COVID-19 and amid a very challenging environment of lockdowns and uncertainties.

Back in January 2020, when the words COVID-19, lockdown and social distancing still hadn’t become part of our day-to-day vocabulary, Blend Network agreed to provide a £460,000 loan to part-finance the acquisition of a beautiful old Victorian shoe factory in Northamptonshire, which had planning to be converted into 24 apartments. The borrower was Provident Homes, an innovative property investment and development company acquiring off-market sites with a mission to build 100 design-led energy-efficient homes per year.

The lender was Blend Network, an innovative syndicated property lending platform backed by a number of heavy-weight institutional investors, family offices and high-net-worth individuals. So, with two very innovative companies coming together, the result could hardly disappoint. The loan was funded in 29 minutes and livestreamed on the borrower’s social media page, thus attracting Blend Network a solid fan base on the way.

Then suddenly came COVID-19 and on 20 March, Prime Minister Boris Johnson announced a UK-wide national lockdown. In a televised address on 23 March, Mr. Johnson announced new strict rules to slow the spread of the disease which included the closure of construction sites.

Despite all these challenges, Provident Homes did a great job securing the site throughout the following months and working with the local council to improve the planning and optimise the space amid a global pandemic. Fast forward 12 months, they were ready to commence developing the site and in December 2020, the first £600,000 tranche of a £1,960,000 total lending facility was funded by 107 Blend Network investors in exactly 102 minutes.

This success story shows the importance of the lender and the borrower working together as a team instead of a traditional lender-borrower relationship. Provident Homes’ values and vision – to create sustainable luxury homes which are environmentally conscious – strongly resonates with Blend Network’s own values and mission which is to provide development finance with flexible terms and help property developers build the homes the country needs.

Daniel Netzer, one of the lending managers at Blend Network who worked on this case, recently sat down with Fahd Khan, director and co-founder of Provident Homes. Over a heartwarming conversation, Fahd discussed how he and his experienced property development team up in Wellingborough had overcome the many challenges through what had been a very difficult year.

The conversation between the two really captured the essence of how Blend Network lends: it is a solutions-based lender that approaches the lending process working with the borrower as a team, by putting on the developer’s hat, by understanding that in the property game unexpected things will always come up and the key is to find appropriate solutions instead of beating up the borrower with a stick.

Click here to watch the interview between Provident Homes and Blend Network.

Blend Network is a peer-to-peer (P2P) property lending platform that provides development finance and bridging loans from £150,000 to £5,000,000 to experienced SME property developers and small construction companies. The company, based in London, is an active lender all across the UK regions including England, Northern Ireland, Wales and Scotland.

More information can be found at www.blendnetwork.com. Blend Loan Network Limited is authorised and regulated by the Financial Conduct Authority (Registration Number: 913456)