Case Study: Baltic Triangle Warehouse Conversion

This case study illustrates how Construction Capital arranged development finance for a warehouse conversion project in the Baltic Triangle, Liverpool, where prime conversion values reach £290–£320 per square foot.

The Project

A Liverpool-based developer with three completed projects approached us to fund a warehouse-to-residential conversion of a four-storey Victorian warehouse in the Baltic Triangle, delivering 18 apartments and two ground-floor commercial units.

Key Numbers

| Metric | Value | |--------|-------| | Location | Baltic Triangle, Liverpool | | Project Type | Warehouse Conversion (Mixed-Use) | | GDV | £8,900K | | Build Period | 17 months | | Local Rental Yield | 6.0% | | Planning Approval Rate | 82% |

The Challenge

The developer needed to move quickly — the vendor had set a 6-week exchange deadline. Traditional bank funding would have taken 8-12 weeks, risking the loss of the site. Additionally, the developer wanted to maximise leverage to preserve capital for a second Knowledge Quarter project in the pipeline. The mixed-use ground-floor element added underwriting complexity that several mainstream lenders weren't comfortable with.

Our Solution

We structured a combined senior debt and mezzanine facility:

The key was finding a senior lender comfortable with the Baltic Triangle creative-quarter dynamics. Liverpool's 82% planning approval rate and the 78 active development sites across the city region gave lenders confidence in the local market.

The Timeline

The Outcome

The project completed on time and within budget at 17 months. All 18 apartments were sold within five months of completion, with prices averaging 6% above appraisal. The two ground-floor commercial units were let within eight weeks and retained as long-term investments.

The developer's return on equity exceeded 28%, significantly enhanced by the leverage structure we arranged. They have since returned to fund two further Liverpool projects through our panel.

Lessons for Liverpool 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 significantly improved the developer's ROE 3. Local knowledge counts — Understanding the Baltic Triangle's market dynamics and Liverpool's planning environment helped secure competitive terms 4. Exit strategy flexibility — With 6.0% yields in the area, developers have the option to sell or hold

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Case study arranged by Construction Capital. Details have been adjusted to protect client confidentiality. Rates and terms are indicative.