Commercial Investment Mortgage Portsmouth
Long-term mortgages secured against income-producing commercial property: Gunwharf Quays retail investment, Lakeside North Harbour office investment, Commercial Road central retail, Cosham retail centre and Southsea inner mixed-use stock. 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 Portsmouth 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 Portsmouth assets with a clear lease; lenders can trend conservative on Portsmouth LTVs where the asset is concentrated retail (Commercial Road and Cascades Centre) or tourism-led leisure (Gunwharf Quays) given the cyclical risk profile, with prime defence and Lakeside multi-tenant office 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 in Lakeside North Harbour or a national-brand outlet on Gunwharf Quays prices materially better than three two-year leases to local independents on a secondary North End or Cosham 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. Portsmouth deal flow is biased toward central retail and mixed-use, the Gunwharf Quays outlet and leisure stock, professional services freeholds on Old Portsmouth and Lakeside, and the Southsea inner mixed-use parades; pure industrial investment is shallower here than across the wider Solent corridor given Portsmouth's island geography, with most industrial flow running through the Walton Road, Voyager Park and Airport Service Road estates on the city fringe.
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 Lakeside North Harbour 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 Portsmouth 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; Gunwharf Quays-anchored retail and listed Old Portsmouth instructions 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 Portsmouth
- Office investment buyers across Lakeside North Harbour and the Gunwharf-adjacent Old Portsmouth quarter
- Gunwharf Quays-anchored retail and central Commercial Road investment buyers in PO1
- Cosham retail centre investors with district-centre footfall driven by Queen Alexandra Hospital and the A27 corridor
- Southsea inner mixed-use investors holding ground-floor retail and upper-floor residential or office on PO5 stock
- Albert Road and Osborne Road Southsea retail investment buyers with mixed independent F&B tenancies
- 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
- Hands-off investors buying long-WAULT industrial and trade-counter assets along the Walton Road, Voyager Park and Airport Service Road estates
Where Portsmouth commercial investment volume actually sits
Portsmouth runs a distinctively leisure-and-retail-led regional commercial investment market: a Gunwharf Quays outlet retail and leisure anchor (operated by Land Securities), a central retail strip on Commercial Road and the Cascades Centre, the Lakeside North Harbour multi-tenant office estate in Cosham, and the Southsea inner mixed-use ring through PO4 and PO5. Brokered investment volume splits roughly across Gunwharf Quays retail and Old Portsmouth heritage stock in PO1, Lakeside North Harbour office investment in PO6, Commercial Road central retail in PO1, the Cosham district-centre retail block on the A27 corridor, and the Southsea inner mixed-use stock through PO4 and PO5. The £350K to £1.8M bracket is the deep volume zone for smaller landlords: parade retail and semi-commercial blocks across Albert Road, Osborne Road, Cosham High Street, North End and the inner PO5 belt. The £2M to £15M+ bracket is where the office and outlet-retail investment flow sits, particularly around Lakeside North Harbour and the Gunwharf Quays leisure ring. Industrial investment volume is constrained by the island geography; what there is concentrates on the Walton Road, Voyager Park and Airport Service Road estates on the Hilsea fringe. 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 Portsmouth commercial investment cases; Hampshire Trust Bank (locally engaged on Portsmouth deals), Allica Bank, HTB, YBS Commercial and Cambridge & Counties engage selectively across the South Coast.
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Exploring Commercial Investment Mortgage for your Portsmouth scheme?
Free-of-charge scheme assessment. Indicative terms within 48 hours.