Example Scenario: Richmond Residential Development
An illustrative example of how development finance could be structured for a residential conversion project in Richmond upon Thames — not a completed transaction.
This is an illustrative example scenario, not a completed transaction, showing how Construction Capital would typically structure development finance for a residential conversion project in Richmond upon Thames, where average property values are £750 per square foot.
The Project
In this scenario, a developer with three completed projects approaches us to fund a high-specification residential conversion of a period building in Richmond.
Key Numbers
| Metric | Value | |--------|-------| | Location | Richmond upon Thames | | Project Type | Luxury Residential Conversion | | GDV | £6,000K | | Build Period | 18 months | | Local Rental Yield | 3.4% | | Planning Approval Rate | 66% |
The Challenge
In this scenario, the developer needs to move quickly — the vendor has set a 6-week exchange deadline. Traditional bank funding would take 8-12 weeks, risking the loss of the site. Additionally, the developer wants to maximise leverage to preserve capital for a second project in the pipeline.
Our Solution
We would structure a combined senior debt and mezzanine facility:
The key is finding a senior lender comfortable with Richmond's heritage-heavy market, where conservation areas cover 52% of the borough. Richmond's 66% planning approval rate and 15 active development sites give lenders confidence in the local market.
The Timeline
The Outcome
In this illustrative scenario, the project completes on time and within budget at 18 months, with units sold within 3 months of practical completion at or above the projected GDV, and a return on equity in the region of 25%, reflecting the leverage structure typically achievable with this facility mix.
Lessons for Richmond Developers
1. Speed matters — Having a broker with established lender relationships cuts weeks off the process 2. Leverage enhances returns — Combining senior and mezzanine finance can significantly improve a developer's ROE 3. Local knowledge counts — Understanding Richmond's planning environment and market values helps secure competitive terms 4. Exit strategy flexibility — With around 3.4% rental yields in Richmond, developers have the option to sell or hold
Discuss your Richmond project with us — indicative terms within 24 hours.
This is an illustrative example scenario for guidance only, not a completed transaction or a real, identifiable client. Rates and terms are indicative and subject to change. Data: HM Land Registry Price Paid Data 2025, Richmond Council Planning Committee Reports 2024/25.
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