Construction industry amongst the first to reopen post-lockdown
Puma Property Finance Associate Paul Murphy gives his thoughts on developer sentiment and the outlook for the construction industry in light of the coronavirus pandemic
Following the lockdown measures imposed to reduce the spread of Covid-19 in the UK, it has been widely anticipated that the construction sector would be one of the first relieved from the most stringent restrictions. In Boris Johnson’s address to the nation on 10 May, he confirmed his desire for the construction and manufacturing industries to reopen the following week.
This should mean that supply chains can be kickstarted once again, breathing life into projects that were previously grinding to a halt due to the virus. Contractors will of course still be required to adhere to the Government’s social distancing measures and rigorous health protocols (which has necessitated a reduction in the number of workers allowed on site at any one time). However, the opportunity for workers to get back onsite and continue with stalling projects has been welcomed by developers and the wider industry. The announcement on 13 May that construction can now continue until 9pm Monday-Saturday will also help support this aim whilst creating safer sites through allowing flexible, extended hours.
Bridging the Covid-19 gap
Whilst there is undoubtedly some uncertainty in the market around the virus, with hesitation from some parties to transact during this time, property professionals are seeing a plethora of opportunities that have arisen in recent weeks and are continuing to seek funding from lenders to capitalise on this. At Puma Property Finance, our deal flow both from brokers and developers has been strong over the last couple of months, with even more emphasis than usual on our pre-development bridging and post-development exit bridge products.
An opportunity for new, long-term relationships
The current economic climate has led to a range of responses from banks and alternative lenders. Some have shut their doors entirely to new lending whilst others are continuing to lend on stricter underwriting criteria and metrics. This brings with it the chance for property professionals to strengthen and diversify their networks, instead of relying on the same lender and professional team they are used to. Not only will this help them in the short-term (to continue to progress transactions that their normal professional team cannot currently accommodate), it will also build lasting relationships and give developers more options for the future when life inevitably returns to normal.
With over £28m of deals closed since the lockdown began, Puma Property Finance is still very much open for business. We are a development finance specialist focussing on stretch-senior loans typically from £5m to £35m to professional developers across the UK. We have been lending for over a decade and have executed over £600m of loans and construction projects to date. In addition to development loans, we also provide finance for site acquisitions pending developments (“pre-development bridges”) and development exit loans for those projects reaching practical completion.
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