For one Luton business owner, the key to future growth was tied up in bricks and mortar. By unlocking the value in their warehouse, they were able to fund a new commercial venture while creating a healthy rental income from an existing asset.
This is how Hayes Finance helped make it happen.
The challenge
Our client owned a substantial commercial warehouse in Luton through a trading limited company. The property was worth around £2 million and had only a small mortgage outstanding. At the time of the application, the building was occupied by the client’s own business.
The plan was to move to new premises that better suited the next phase of their operations, rent out the current warehouse to another company, and use the equity to fund a new commercial enterprise.
While the objectives were clear, there were hurdles to overcome. Raising capital against a commercial property that was about to change from owner-occupied to a rental asset required careful planning and a lender who understood the change in circumstances. On top of that, there was a relatively tight timescale to complete the deal.
Our approach
We began by building a complete picture of the client’s goals, timescales and long-term plans. This ensured that whatever funding package we put in place would not only work for the immediate project but also support the client well into the future.
After reviewing the market, we identified YBS Commercial as the best fit for this case. They had the right product and the flexibility to work with the property’s change in use. The finance package we secured was a £500,000 remortgage on a 15-year capital repayment term, fixed for the first five years at 7.4 percent. Once let to the new tenant, the warehouse was projected to generate around £150,000 in annual rental income, comfortably covering repayments and creating an attractive return.
Navigating the challenges
Even with the right lender on board, the process was not without complications. As the transaction progressed, legal issues emerged that had the potential to delay completion. For many, this could have stalled the project, but our role is not simply to arrange finance and walk away.
We kept in close contact with the client, ensuring they were informed at every stage and reassured that the plan remained on track. We also worked closely with the YBS Commercial team, whose commitment to supporting the deal was invaluable. Special thanks go to Mark Setchell and Pedro Lopes for their involvement and responsiveness throughout the process.
Behind the scenes, we coordinated with the legal teams to make sure documents and requirements were dealt with promptly, keeping momentum going even when challenges arose. By focusing on solutions rather than obstacles, we ensured the deal moved steadily towards completion.
The result
With the remortgage completed, the client secured the £500,000 needed to launch their new commercial enterprise. The relocation to new premises went ahead smoothly, and the Luton warehouse was successfully let to another business. The resulting rental income of around £150,000 per year not only covered the new mortgage but also provided an additional source of revenue to support the client’s future plans.
The result was twofold: the client achieved the capital release they needed to grow, and they retained ownership of a valuable asset that would continue to generate income for years to come.
Kieran Hayes, Managing Director at Hayes Finance, reflected on the project:
“It’s always satisfying when we can help a client make a big strategic move without compromising their financial stability. This was a great example of how property can be used to unlock new opportunities. There were challenges along the way, but seeing the client in a stronger position, with both the capital to grow and a new income stream has made it all worthwhile.”
Why this case matters
Many business owners have significant value tied up in their premises without fully realising what it could do for them. Commercial property can be much more than just a place to operate — when used strategically, it can become a powerful tool for growth.
The Luton warehouse case is a perfect example. By taking a proactive approach, choosing a lender that understood the bigger picture, and structuring finance to fit future income plans, the client was able to move forward without overextending their business. Just as importantly, the process showed the value of having an advisor who will anticipate potential problems and keep the project moving until the job is done.
If this sounds familiar
If you own commercial property and want to:
- Raise capital for a new venture
- Relocate your business
- Turn your premises into a rental income stream
…it could be time to review your options.
Our team can help you make the most of your assets, structure finance effectively and manage the process from start to finish.
To talk about your plans in confidence, contact Hayes Finance today.
