Commercial Investment Mortgage Coventry
Long-term mortgages secured against income-producing commercial property: Friargate Grade A office investment, City Centre South retail blocks, Cathedral Lanes mixed-use, FarGo Village independent retail and F&B, Earlsdon F&B parade stock, and Westwood Business Park office investment. Loan-to-value 60 to 75%, interest cover ratio 140 to 160% stressed, interest rates 6.5 to 8.5% pa, 5 to 25 year repayment terms. Limited company SPV, LLP and individual structures all supported.
LTV
60 to 75%
Rate
From 6.5% pa
Term
5 to 25 years
ICR
140 to 160%
What is an investment commercial mortgage and how is it underwritten?
A commercial investment mortgage is long-term debt secured against a let commercial property held as an income-producing asset. The borrower is typically a limited company SPV (the dominant structure for new acquisitions across the Coventry market), an LLP, or an individual investor; the security is the property; the affordability test is rent against the cost of borrowing. Unlike a residential buy-to-let mortgage, which tests personal income and rental yield against ASTs, commercial investment underwrites against business tenancies on FRI (full repairing and insuring) leases.
The headline underwriting metric is the interest cover ratio (ICR): gross rent divided by interest cost, typically required at 140 to 160% stressed at a notional rate 1 to 2% above pay rate. Some lenders also test DSCR (debt-service coverage ratio) on a fully-amortising basis at 130 to 145% cover. Loan-to-value commonly stretches to 60 to 75% for income-producing Coventry assets with a clear lease; lenders can trend conservative on Coventry LTVs where the asset is concentrated retail (Lower Precinct, West Orchards, Cathedral Lanes, City Centre South phased delivery) given the cyclical risk profile, with prime Friargate office and Westwood Business Park stock pricing more keenly.
Tenant covenant and lease length are the second-order drivers, and they matter as much as LTV. A 10-year unbroken lease to an investment-grade office tenant on Friargate or a national-brand retailer on Cathedral Lanes prices materially better than three two-year leases to local independents on a secondary Foleshill Road or Holbrook Lane parade. Vacant or part-let assets fund through specialist desks at tighter LTVs and wider interest rates, typically via commercial bridge-to-let with an agreed term-out exit. Coventry deal flow is biased toward central retail and mixed-use, the Friargate Grade A office stream, the FarGo Village independent retail-and-leisure cluster on Far Gosford Street, the Earlsdon F&B parade, and the Westwood Business Park multi-let office stock; industrial investment runs deep through the Coventry Gateway and Prologis Park Ryton corridor and the inner Holbrook Lane / Bayton Road belt.
Investment commercial lending sits outside FCA regulation in almost all cases: it is a business borrowing against a business asset, not a residential mortgage. Stamp duty land tax applies on purchase at the standard commercial rates (0% to £150K, 2% £150K to £250K, 5% above £250K). For limited company SPV structures we factor SDLT, valuation, legal and arrangement fees into the all-in deposit requirement before submission. Indicative case seed: a £2.2M let Friargate Grade A office investment, FRI lease, 9 years unbroken, strong-covenant professional services tenant, priced at 65% LTV (£1.43M facility) on a 5-year fix at around 6.9% pa with ICR comfortably above 150%.
Pricing and lender appetite across the Coventry investment market
1. Asset and rent appraisal
We review the property, the lease, the tenant covenant and the rent roll. ICR and DSCR modelled at three lender stress rates so you see where each desk will land.
2. Indicative terms in 48 hours
Three to five lender quotes covering interest rate, LTV, term, fees, ICR comfort and conditions. You pick the preferred route.
3. Credit pack
Property file, lease, tenant accounts (where covenant matters), borrower SPV pack, deposit proof. Sent to chosen lender.
4. RICS Red Book valuation
Includes market rent assessment and estimated rental value (ERV), both important to the underwrite. Typically 2 to 3 weeks; Cathedral Quarter listed-building instructions and City Centre South phased-delivery cases take longer.
5. Credit approval and legal pack
Approval typically 1 to 3 weeks post-valuation. Legals 3 to 5 weeks (longer if leasehold or complex tenant pack).
6. Drawdown and SDLT
Funds drawn at completion. Stamp duty paid by buyer. ICR sometimes monitored through life of facility on larger or multi-let assets.
Investor profiles we routinely place across Coventry
- Office investment buyers across Friargate Grade A stock and the wider central CV1 office quarter (Greyfriars Road, Earl Street, Hertford Street)
- City Centre South retail investment buyers picking up phased-delivery retail-led mixed-use lots in central CV1
- Cathedral Lanes mixed-use investors holding national-brand retail with leisure and F&B overlay
- FarGo Village independent retail and F&B investors on Far Gosford Street (CV1)
- Earlsdon F&B parade investors with mixed independent food, drink and service tenancies along Earlsdon Avenue and Earlsdon Street (CV5)
- Westwood Business Park office investment buyers in CV4 8 with multi-tenant Grade B office stock
- Limited company SPV structures for new acquisitions; individual investor purchases at the smaller end
- Refinancing existing investment portfolios off maturing 5-year fixes from 2019 to 2021 vintage
Where Coventry commercial investment volume actually sits
Coventry runs a distinctively diversified regional commercial investment market: a Friargate Grade A office spine in central CV1 (anchored by Two Friargate / HMRC and One Friargate / CCC HQ, with hotel and follow-on plots in delivery), a phased City Centre South retail-led mixed-use scheme by Shearer Property Regeneration Partners, the Cathedral Lanes leisure-and-retail block in the Cathedral Quarter, the FarGo Village independent retail and F&B cluster on Far Gosford Street, the Earlsdon F&B parade in CV5, and the Westwood Business Park multi-let office stock at CV4 8. Brokered investment volume splits roughly across Friargate office and the central CV1 office quarter, City Centre South retail and Cathedral Lanes mixed-use, FarGo Village on Far Gosford Street, Earlsdon F&B in CV5, and Westwood Business Park office investment in CV4. The £350K to £1.8M bracket is the deep volume zone for smaller landlords: parade retail and semi-commercial blocks across Far Gosford Street, Earlsdon Avenue, Spon Street and Foleshill Road. The £2M to £15M+ bracket is where the Friargate office, City Centre South retail and Westwood Business Park multi-let flow sits. Industrial investment is well supported through the Coventry Gateway, Prologis Park Ryton and the inner Holbrook Lane / Bayton Road belt; that volume routes more often through the JLR Tier 1 supplier ecosystem owner-occupier channel than as third-party let investment. Interest rates currently 6.5 to 8.5% pa depending on covenant and LTV; LTVs typically capped at 60 to 75%. Shawbrook, InterBay Commercial, Cynergy Bank, LendInvest, NatWest, Lloyds, Barclays and Santander all compete on Coventry commercial investment cases; Cambridge & Counties Bank is particularly strong on Warwickshire and East Midlands cases and engages actively on Coventry investment deals; Allica Bank, HTB, YBS Commercial, Aldermore and Paragon engage selectively across the West Midlands.
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Exploring Commercial Investment Mortgage for your Coventry scheme?
Free-of-charge scheme assessment. Indicative terms within 48 hours.