Urban Exposure PLC (“Urban Exposure” or the “Company”) has been established to pursue two main strategies in the residential development finance market – asset management of development finance loans and direct lending (using its own balance sheet) into development finance loans.
Asset management and direct lending
The Company focuses on two main revenue streams: interest and fees generated on principal lending from its own balance sheet, and asset management income generated from managing and servicing real estate development loans financed by third parties. Additional revenue may also be generated from syndicated loans, facility agent and security agent fees and co-lender asset management fees. In the medium term, the Company intends to develop its asset management activities and technological platform capabilities to build revenue growth.
Given the Urban Exposure team’s extensive experience as both lender and developer, the team is able to oversee and monitor every stage of a development project. With each draw-down, typically on a monthly basis, the Urban Exposure team ensures that strict criteria are satisfied by its borrowers through external as well as its own in-house expert assessment. With this experience and expertise, we are well-placed to take over from a borrower and manage the completion of a development project should any material issues arise and do, in any case, become actively involved with the developments they have financed. This has helped establish the team’s proven track record and has contributed to the success that we have had in ensuring that none of our loans have suffered losses or arrears.
Strong developer relationships
The Urban Exposure team has relationships with over 300 high quality residential developers throughout the UK, consisting of SMEs and larger developers. These include relationships with Acorn, Argent, Ballymore, Capital & Provident, Clearview Homes, Galliard Homes, MACE, Princeton Homes, Regal London, Seven Capital, Urban Splash and U+I PLC. As a general rule, borrowers are required to have a track record in real estate development in the UK market of 10 years or more.
These strong developer relationships generate repeat business and have been built over time and depend on core values such as trust and certainty of execution. In many circumstances, the team will become aware of the same deal from multiple developers, which enables it to be in a strong position to work with the winning developer.
Strong investor relationships and asset management capability
The Urban Exposure team has a strong institutional investor network and deep relationships from its near 16 years in the industry, initially as principal developers and then as a non-bank, specialist development finance lender in the UK following the global financial crisis. We believe that, for a number of institutions, they have become the preferred asset manager for investing in UK residential development finance.
The strong, risk adjusted returns that the Urban Exposure Team has delivered to its investors is helping to increase the appetite for institutions to invest in this sector via our asset management platform, and the principal lending business is expected to enhance this further. As the brand and track record of the Urban Exposure business has grown, it receives increasing enquiries from new investors looking to allocate capital in this space, but who are reliant on a partner to invest with due to the technical barriers to entry.
Geographical and market focus
The Urban Exposure Business is focused on lending throughout the United Kingdom, predominantly in major cities and towns within England. The nature of the development projects typically funded are core housing and apartment projects which are generally affordable and in high demand. This helps ensure geographical diversification and that stringent sales targets throughout the life of a development are met.