Davon has provided mezzanine finance for a luxury residential scheme in Surrey releasing capital for developer B3 Homes run by professional footballer Lee Brown to invest in new projects.

Tim Clark of real estate advisors LEXI Finance advised B3 Homes during the introduction to Davon regarding the £2.9 million development in Cobham, eventually leading to a second-tier facility on top of the main tranche of loan finance from Shawbrook Bank.

As with many mezzanine deals, the contract allowed the developer to move on to new projects rather than waiting for the current one to complete. In this case, Lee was able to move quickly to acquire two prime residential land parcels in Purley and the village of Warlingham, Surrey

Free up capital

Davon’s David Norman explains: “Second-tier loans free up capital, which is especially useful in the current environment with rising materials costs and project overruns. It’s simply a matter of balancing the cost of the mezzanine finance against the value of being able to bring forward your next scheme or accelerating completion of your current one.”

It was Lee’s first experience of using mezzanine finance, as he explains: “The land came up, and I needed to move quickly. Working with Davon, it was a really smooth transaction, and we got the extra facility in place quickly. I would definitely use them again in a similar situation.”

Football career

Lee now plays for Wimbledon but his first development was in Bristol when he was playing for Rovers around seven years ago. He bought a house for himself with some land attached where he secured planning permission to build a four-bed home.

Back then, as a footballer in his mid-20s, he was very aware that his career could end at a young age, so he was looking for a business to carry him forward. Now 33, he is still playing and says because he started developing young, he is now in a position that he can do it out of enjoyment.

The Cobham development comprises two four-bedroom semi-detached luxury houses at 39 Stoke Road, Stoke D’Abernon. Groundwork has been completed and blockwork is coming up. Completion date is to be confirmed.

High-end residential portfolio

The company focuses on developing niche, high-end residential homes across Surrey. Lee works with award-winning architects and interior designers to maximise value on sites in desirable, fashionable and exclusive areas.

Davon worked with Tim Clark of Lexi Finance and Charles Spence from senior debt provider Shawbrook Bank with legal support from Steph Richards of Boyes Turner.

Shawbrook is a UK retail and commercial bank that also provides bespoke funding solutions to support new build or refurbishment projects.

LEXI Finance is a real estate capital advisory which acts for property firms who require debt and equity to support their real estate interests in the UK and Western Europe.

Boyes Turner is a full-service UK law firm whose work in the construction space covers projects ranging from major urban regeneration schemes to office blocks, shopping centres, hospitality venues and smaller new build housing developments.

Project info, finance and legal team

Client: B3 Homes (B3 Homes Developments Ltd)

GDV:  £2,825,000

Senior Debt Provider: Charles Spence, Shawbrook

Solicitor: Steph Richards, Boyes Turner

Debt Advisor: Tim Clark, LEXI Finance