Bridging finance for warehouses

Why warehouse bridging is in the spotlight

Warehouse and logistics assets continue to underpin the UK’s modern economy, from ecommerce fulfilment to light manufacturing. When opportunities surface, timing dictates value. That is why short-term bridging finance has moved centre stage for developers, investors, and owner-occupiers seeking to buy, refinance, or reposition industrial space at speed.

The market backdrop is telling. UK bridging loan books surpassed £10 billion for the first time and are projected to reach about £12.2 billion by the end of 2025. Completions climbed sharply through 2024, with a record fourth quarter and continued momentum into 2025. At the same time, competition among lenders has nudged average monthly rates down towards the low 0.8s, while operational improvements shortened completion times to near-record levels. For practical purposes, that means money is arriving faster and, in many cases, at a lower carrying cost than a year ago.

For warehouse buyers, speed and certainty carry a premium. Auction purchases, off-market deals, and urgent refinance scenarios rarely align with the longer underwriting cycles of traditional term loans. Recent data shows average bridging completion times around the 43-day mark, with the fastest cases completing in just over a month. Investment purchases now account for a growing share of bridging activity as investors capitalise on regional opportunities beyond Prime Central London, including non-PCL London and the Home Counties.

Understanding APR is not just about percentages - it is about knowing what you will pay in real terms. Bridging makes that calculation refreshingly transparent: a monthly rate, arrangement fee, legal and valuation costs, and a defined exit plan.

Speed and flexibility are the core advantages - and in warehouse transactions, they can be the difference between securing the unit and losing it.

Next steps you can take today:

• Line up a credible exit route before you apply.

• Organise key documents early to compress timelines.

• Compare multiple lenders to sharpen pricing and terms.

Who benefits most from this funding?

If you are acquiring a warehouse quickly, refinancing a maturing facility, funding a change of use, or bridging to a longer-term commercial mortgage, this route is designed for you. Property investors scaling portfolios, SMEs needing an owner-occupied unit, and developers executing refurbishments or light industrial conversions are typical users. Because completions can be achieved in weeks rather than months, bridging suits time-sensitive scenarios like auction purchases or chain breaks. With regional diversification accelerating, opportunities extend well beyond London postcodes, making bridging relevant for buyers across England, Scotland, and Wales who value certainty of funds and a clear, time-bound finance solution.

Your funding choices at a glance

1. Standard bridging loan for purchase-only

2. Refurbishment bridging for light works

3. Heavy works bridging with project monitoring

4. Auction finance with accelerated timelines

5. Development exit bridge to release cash

6. Bridging for refinance of existing debt

Costs, impact, returns and risks

Can you qualify?

Eligibility focuses on the asset, the borrower’s experience, and the credibility of the exit. Lenders will expect clean title, an appropriate valuation, and clarity on planning or permitted development where relevant. For investors and SMEs, typical loan-to-value sits in the 50 to 65 percent range, with flexible approaches for stronger covenants or lower leverage. Regulated and unregulated loans are both available, though most warehouse transactions fall on the unregulated side.

A straightforward exit is essential. Common routes include sale once value-add works are complete, or refinance onto a commercial mortgage or buy-to-let facility once leases and income are stabilised. Lenders will examine cash flow projections, contractor credentials for refurbishment, and environmental or structural reports if the site suggests additional risk. Kandoo can help you align these elements early, comparing lenders that specialise in industrial assets and matching your deal profile to appetites that support quick approvals.

From enquiry to completion

1. Share your deal, timescales, and exit strategy upfront.

2. Receive indicative terms after initial lender review.

3. Instruct valuation and legal work simultaneously.

4. Provide planning, tenancy, and works documentation.

5. Finalise underwriting and satisfy any conditions.

6. Sign facility agreements and legal undertakings.

7. Complete drawdown to meet your deadline.

The trade-offs in plain sight

What to check before you commit

Bridging finance is designed to be short, sharp, and targeted. The key is to keep your exit realistic and timed with precision. Confirm your refurbishment scope, costings, and contractor availability before you draw funds, and consider contingency for build overruns or delayed lettings. Ensure searches, title issues, and any environmental matters are addressed early to avoid last-minute delays. Watch your day-one cash requirement, including fees and retained interest, and test your outcome against modest rent or yield shifts. With application volumes rising and completion times falling, lender choice matters: prioritise firms that can deliver at the pace your warehouse deal demands.

Alternatives worth considering

1. Commercial mortgage for long-term hold at lower rates

2. Development finance for ground-up or heavy conversions

3. Mezzanine finance to increase leverage on viable schemes

4. Asset-based lending against stock and receivables

5. Sale and leaseback to release equity without moving

FAQs

Q: How quickly can warehouse bridging complete? A: Recent market performance shows best-in-class completions close to 32 days, with averages around 43 days depending on valuation and legal complexity.

Q: What monthly rate should I budget for? A: Competitive transactions have achieved around 0.64% to 0.81% per month, influenced by LTV, asset quality, and borrower experience.

Q: What loan-to-value is typical on industrial assets? A: Expect broadly 50% to 65% LTV, with lower leverage rewarding you with faster decisions and tighter pricing.

Q: Do I need a defined exit plan? A: Yes. Lenders look for a clear route via sale, refinance to a term facility, or stabilised income supporting a remortgage.

Q: Can I fund light refurbishments with a bridge? A: Yes. Many lenders support light works and lease-up to enhance value before sale or refinance.

Q: Are regional warehouses in favour? A: Appetite has broadened beyond Prime Central London, with increased focus on non-PCL London and the Home Counties alongside regional hubs.

How Kandoo helps you move first

Kandoo is a UK-based retail finance broker that connects you with specialist lenders who understand industrial assets. We compare rates, LTVs, and speed of delivery, structure your application around a credible exit, and coordinate valuation and legal timelines to help you complete on schedule. Ready to move on a unit? Speak to us today.

Important information

This guide is for information only and does not constitute advice. Bridging finance is secured against property and may be repossessed if you do not keep up repayments. Always seek independent legal and financial advice before proceeding.