Key points:
– Location: Prime location, two minutes’ walk from Watford Junction station (no parking necessary)
– Purchase price: £700,000 (June 2023)
– Original property: Occupied retail unit, empty warehouse, derelict flat, and rear garage
– Conversion strategy:
– Title split into two properties, owned by separate companies
– Converted flat into a 5-bed HMO and warehouse into a two-bedroom flat (Savoys Properties)
– Retained retail unit
– Sold garage with planning permission for £135,000 (November 2023)
– Financing:
– Bridging loan (£485,000) transitioned to heavy refurbishment loan (£645,000, once planning granted) with Octane Capital
– Refinanced at £750,000 with Hampshire Trust Bank (December 2024)
– Costs and value:
– Conversion costs: £160,000
– Final valuation: £1,125,000
– Annual rental income: £85,000 of retail unit, HMO and flat
In June 2023, CPC Finance started a mixed-use converson project near Watford Junction station working with Savoys Properties. The property, sourced by Savoys, was located just a two-minute walk from Watford Junction station. It originally consisted of an occupied retail unit, an empty warehouse, a derelict flat above, and a rear garage and land, with service road access. This project required a strategic approach and planning at every step including title splitting to make it a success.
The whole property was purchased for £700,000 and divided on completion of purchase to optimise its conversion potential. Its original layout included a retail unit in use on the ground floor, a derelict flat above, a warehouse with conversion opportunities, and a separate garage. With its prime location and absence of parking requirements (due to the train station close by) or Article 4 restrictions, the property offered significant possibilities.
Conversion strategy
The conversion strategy focused on maximising the property’s potential through splitting the title so that the shop, flat and warehouse were on one title, with the garage on another. Before the original purchase, CPC Finance established two separate companies: CPC Property took ownership of the main building, while CPC Property 2 owned the garage and its associated land. This setup, facilitated by Ronald Fletcher Baker solicitors, allowed the garage portion to be valued independently at £20,000 without planning permission.
For the main buildings, CPC planned to convert the derelict flat into a five-bedroom HMO and transform the warehouse into a two-bedroom flat while retaining the retail unit.
For the garage, planning permission was obtained for residential conversion in November 2023, and CPC Finance decided to sell the garage at auction rather than develop it. The sale, finalised in November 2023, fetched £135,000, freeing up financial resources.
The project timeline
The initial property purchase was completed in June 2023, and planning permission for the warehouse conversion was secured by October 2023. By August 2024, the refurbishment on the flat and warehouse, carried out by Savoys Properties, was complete, and the property’s valuation had risen significantly.
Refinancing was finalised in December 2024, bringing the conversion to a successful conclusion. By the end of the project, the property’s valuation had reached £1,125,000, with rental of £85,000 per year in rent across the retail unit, HMO and flats.
The financing
The project relied on a three-stage financing approach. Initially, a bridging loan of £485,000 was secured with Octane Capital to fund the purchase. During the conversion phase of the flat and warehouse, CPC Finance transitioned this loan to a heavy refurbishment loan with the same lender after planning granted, increasing the total to £645,000 and covering an additional £160,000 for construction costs without incurring extra fees. In December 2024, the property was refinanced with Hampshire Trust Bank for £750,000.
Strategic planning played a crucial role in this project’s success. Working with solicitors and undertaking title splitting and pre-planned company structures provided flexibility, while professional management by Savoys Properties meant the refurbishment works went smoothly. The prime location near Watford Junction station enhanced the property’s appeal, and the absence of parking requirements or Article 4 restrictions allowed for more conversion opportunities.
