In the world of commercial property finance, some deals are straightforward. Others require creativity, expertise, and a willingness to navigate complex structures that would send high street lenders running for the hills. Today, we're sharing the story of one such transaction—a £13.4 million bridging loan secured against prime commercial property, where the borrower was an offshore trust with multiple beneficiaries across three jurisdictions.
The Challenge: When Structure Meets Opportunity
The call came through on a Tuesday morning. Our client, a well-established property investment advisor, had identified a unique opportunity for their offshore trust client. A Grade A office building in Manchester's central business district had come to market unexpectedly when the previous owner faced cash flow difficulties. The trust needed to move quickly—the vendor wanted completion within six weeks, and traditional commercial mortgages simply couldn't accommodate this timeline.
But speed wasn't the only complication. The borrowing entity was a Cayman Islands trust with beneficiaries residing in the UK, Switzerland, and Dubai. The trust structure, whilst perfectly legitimate and tax-efficient, represented the kind of complexity that sends most mainstream lenders scrambling for their risk committees.
"We'd already approached four different banks," the advisor explained during our initial consultation. "Two wouldn't even consider lending to an offshore structure, one wanted a six-month due diligence process, and the fourth demanded personal guarantees from all beneficiaries, which simply wasn't feasible given their locations and the trust's protective structure."
Understanding the Unusual
At our firm, unusual structures don't faze us—they energise us. We've built our reputation on tackling the complex deals that others won't touch, providing bridging finance up to £100 million for borrowers who don't fit the conventional lending mould. Whether it's overseas entities, complex ownership structures, or time-sensitive opportunities, we specialise in finding solutions where others see only problems.
The Manchester property was impressive: a modern 15-storey office building with blue-chip tenants on long leases, generating £2.1 million in annual rental income. The trust was acquiring it for £18 million—a significant discount to its £22 million market valuation due to the vendor's urgent sale requirements. Our proposed £13.4 million facility would represent 74% loan-to-value against the purchase price, or just 61% against the current market value.
Navigating the Offshore Maze
Working with offshore trusts requires a deep understanding of international trust law, tax implications, and regulatory requirements across multiple jurisdictions. The Cayman Islands trust in question had been established five years earlier as part of a legitimate succession planning strategy for a family with international business interests.
Our first step was conducting thorough due diligence on the trust structure itself. We needed to understand the powers of the trustees, the nature of the beneficiaries' interests, and the trust's investment objectives. This wasn't simply about ticking compliance boxes—we needed to ensure the loan structure would work within the trust's governing documents and wouldn't inadvertently trigger adverse tax consequences in any of the relevant jurisdictions.
The trust deed permitted property investment, and the trustees had appropriate powers to grant security. However, the original trust structure hadn't anticipated UK property acquisitions, so we worked closely with the trust's Cayman counsel to ensure all documentation would be enforceable.
Structuring the Solution
Traditional bridging lenders often struggle with offshore borrowers because they lack the necessary international expertise and risk appetite. Our approach was different. We structured the facility as a 12-month term loan with a 0.75% monthly interest rate, secured by a first legal charge over the property.
Given the offshore nature of the borrower, we implemented additional security measures. These included a corporate guarantee from a UK subsidiary company (itself owned by the trust), comprehensive insurance arrangements with our firm named as first loss payee, and detailed reporting requirements to monitor the property's performance throughout the loan term.
The interest could be serviced from the property's rental income—a crucial factor that demonstrated the loan's commercial viability. With annual rental income of £2.1 million and monthly interest payments of approximately £100,000, there was comfortable headroom even after allowing for property management costs and contingencies.
Due Diligence in a Digital World
One of the most interesting aspects of this transaction was conducting due diligence across multiple time zones. The trustees were based in the Cayman Islands, the beneficiaries were scattered across three continents, and their advisors were located in London, Zurich, and Dubai.
We coordinated video conferences at ungodly hours, reviewed documents translated into multiple languages, and navigated the requirements for document authentication across different legal systems. Our team's experience with international transactions proved invaluable—we knew which documents were essential, which could be obtained later, and how to maintain momentum without compromising on due diligence standards.
The property's due diligence was more straightforward but no less thorough. We commissioned a full structural survey, reviewed all tenant leases, confirmed insurance arrangements, and verified the rental income. The building's quality and tenant covenant strength justified our confidence in the security.
Completion Against the Clock
With just three weeks remaining until the vendor's deadline, we moved into completion mode. Our legal team worked around the clock to prepare the facility documentation, liaising with Cayman counsel to ensure compatibility with local trust law and coordinating with the conveyancing solicitors to synchronise the property acquisition and loan completion.
The funds were drawn down on a Wednesday morning, enabling the trust to complete its property acquisition with two days to spare. The entire process, from initial inquiry to funds release, had taken just four weeks—a testament to our team's efficiency and expertise in handling complex structures.
Beyond the Headlines
Six months later, the trust successfully refinanced the property with a traditional commercial mortgage, repaying our bridging facility in full. The rental income had performed exactly as projected, and the property's value had increased to £23.5 million as the Manchester office market strengthened.
This transaction exemplifies why we've built our business around the unusual and complex. Whilst other lenders focus on vanilla deals with straightforward borrowers, we've found a profitable niche in providing solutions for sophisticated clients with legitimate but complex requirements.
The Bigger Picture
The offshore trust bridging loan market continues to evolve as international families and businesses seek flexible solutions for UK property investment. Recent changes to UK tax legislation have increased demand for bridging finance in this sector, as traditional mortgage lenders have become more risk-averse around non-UK entities.
For borrowers with offshore structures, speed and expertise matter more than marginal interest rate differences. When a unique opportunity arises, the ability to move quickly with confidence often determines success or failure.
Our commitment to handling transactions of up to £100 million enables us to support a wide range of transactions, from individual property acquisitions to complex portfolio transactions. Whether the borrower is a Cayman trust, a Jersey company, or a Dubai family office, our focus remains constant: understanding the client's objectives, structuring appropriate solutions, and delivering results when others can't or won't.
In a world where financial services are increasingly commoditised, specialising in the unusual isn't just our differentiator—it's our competitive advantage.
