Office development finance
Funding for Grade A, refurbishment and flexible-workspace office schemes.
Funding offices development
Office development is underwritten today through the lens of letting risk and energy performance. Occupiers have polarised towards high-quality, well-located, energy-efficient space, and lenders have followed. A prime, energy-efficient scheme with strong ESG credentials and a credible letting strategy attracts funding, while secondary stock without a clear demand story is harder to place.
We arrange finance for new Grade A offices, comprehensive refurbishments that reposition tired stock, and flexible or managed-workspace schemes. Pre-lets and anchor tenants materially improve the terms available. Where an older office is a candidate for residential conversion, permitted development finance may be the better route, and we can model and compare both.
Scheme types we fund
- Grade A new-build offices
- Comprehensive refurbishment and repositioning
- Flexible and managed-workspace schemes
- Business-park and out-of-town office developments
Indicative terms
- Loan to costUp to 65% senior
- Loan to GDVUp to 60%
- Key testsLetting strategy, ESG rating, covenant
- BoostPre-lets and anchor tenants improve terms
Indicative only. Terms vary by lender, scheme and borrower and are not an offer of finance.
How we fund an office scheme
Office development is funded on senior debt sized against cost and the completed investment value, with leverage that reflects the letting position. A scheme with a pre-let or strong anchor covenant supports higher leverage and keener pricing, because the income is contracted. Speculative offices are fundable in supply-constrained prime markets but at lower leverage, often with an interest reserve to cover the letting void after practical completion.
Lender appetite for offices
Appetite is selective and quality-driven. Banks and debt funds back prime, energy-efficient offices in strong city and business-park locations, particularly with a pre-let. Lenders increasingly screen for EPC rating and ESG credentials, and many will not fund secondary space without a clear repositioning or conversion plan. A credible letting strategy is the difference between a competitive field of lenders and none.
The exit
The exit is usually an investment sale of the let building to an institutional buyer, or a refinance onto longer-term investment debt once the scheme is income-producing. Where letting takes time after completion, development exit finance can hold the scheme on cheaper money during the void and letting period.
Finance structures that suit this sector
- Senior development financeMain facility, leverage set by the letting position.
- Stretch senior financeHigher leverage where a pre-let underpins the income.
- Mezzanine financeBridges the gap on larger prime schemes.
- Permitted development financeFor office-to-residential conversion as an alternative route.
Fund a offices scheme
A view on fundability within one working day.
How an office scheme's value is built
Office value rests on the rent a letting will achieve and the yield an investor pays for that income, so letting risk dominates the appraisal. Lenders model gross development value from contracted or estimated rent, weigh EPC and ESG credentials that drive lettability, and look for a margin that holds if letting takes longer than planned.
Indicative office finance rates and leverage
Senior office development finance is typically sized to 65 percent of cost and 60 percent of GDV, priced in the development-finance range and improving sharply with a pre-let. Speculative schemes draw lower leverage and an interest reserve to cover the void; a pre-let to a strong covenant unlocks stretch senior or mezzanine.
Frequently asked questions
Is office development still fundable?
Yes, for the right scheme. Lenders back high-quality, energy-efficient, well-located offices with a credible letting strategy. Pre-lets and strong ESG credentials are the difference between fundable and not.
Should I convert an old office instead of redeveloping?
Often it is worth comparing. Office-to-residential conversion under permitted development can be quicker and cheaper than a full redevelopment. We can model both and arrange whichever the numbers favour.
Can I fund a speculative office scheme?
In a supply-constrained prime market, yes, though at lower leverage than a pre-let scheme and usually with an interest reserve to cover the letting void after completion.
Does EPC rating affect office development finance?
Increasingly, yes. Many lenders screen for energy performance and will favour, or only fund, schemes that deliver high EPC ratings, reflecting occupier demand and the regulatory direction on commercial energy standards.
Funding a offices scheme?
Tell us about your development and we will come back with a view on fundability and likely terms.