Loans

For the first five years from April 2007 to April 2012, Strata advanced 33 loans on developments with a gross development value of circa £125m. The average loan size was circa £525,000.

The Funding Adviser rejected circa £1.85bn of proposed property development, a conversion rate of circa 6.7% of loans ‘reviewed’ to those ‘completed’.

Over the same period 15 of the loans were concluded, representing circa £7.0m advanced on circa £54m worth of development.
 
In the opinion of the management team, Strata is well positioned in a less competitive lending market due to its track record and liquidity. The Funding Adviser is able to recommend the ‘best in class’ developments proposed by experienced developers, with a proven track record.
 
The key limiting factor in 2010 to lending activity was the weakness in the senior debt market and a continued cautious approach by the Fund. 2011-2012 has seen more liquidity from the banks, but not much.
 
The portfolio of Strata loans benefits from an attractive ‘spread of risk’ in terms of number of developments, number of developers, locations and end values.