A Special Purpose Vehicle (SPV) is a legal entity created for a specific, defined purpose. SPV's are subject to standard UK company law under Companies Act 2006.
A key first decision is whether to use a single SPV for both land holding and development, or separate corporate entities. A single SPV is simpler but separate companies can offer better risk protection and future flexibility for phased developments.
SPV's are particularly valuable for developments with planned exits because they provide a clear and contained vehicle for the project. This makes the development more attractive to potential purchasers by:
The ability to sell either the asset or the entire SPV gives flexibility in structuring the exit to match market conditions and buyer preferences. This clean approach is particularly attractive to institutional investors and funds who often prefer simplified acquisition structures.
Ring-fenced structure - for example, if you own ten properties, each in a separate SPV, a problem with one property can't affect the others.
Restricted powers - articles might state it can only borrow from specific lenders or up to certain amounts.
Subsidiary/orphan structure - either owned by your main company or set up independently through a trust structure.
Minimal employees - often just directors and a company secretary, with services contracted out.
Limited administration - basic annual filings and board meetings only.
Debt restrictions - typically can only borrow for its stated purpose
Using an SPV within a wider group structure offers advantages when :-
Multiple developments are ongoing
Group-wide funding arrangements exist
Tax planning requires flexibility between entities
Shared resources and expertise across projects is needed
Brand value/track record of parent company is important for securing contracts or funding
Development projects often represent significant risk and require clear isolation from other activities. A single development SPV structure provides the cleanest approach for funders and developers alike.
Complex mixed-use schemes often benefit from multiple SPVs to reflect different risk profiles and potential exit strategies for each element of the development.
Multiple SPV structure example for city centre regeneration with retail, residential and leisure :-
MasterCo SPV owns overall site
ResidentialCo SPV for apartments
RetailCo SPV for shopping areas
CarParkCo SPV for parking operations
Service Charge Management Property management SPVs provide a clean vehicle for:
Ring-fencing service charge funds
Clear accounting for different cost centers
Protection of leaseholder funds
Transparent reporting to residents
We are experienced in both property development and corporate structuring, providing practical, commercial advice that protects your interests while facilitating your development goals. Our team has extensive experience working with developers, from single project SPVs to complex group structures.
Our services include :-
advising on optimal SPV structure for your specific development.
setting up the SPV and all necessary documentation.
structuring relationships between group companies.
supporting funding arrangements and security documentation.
construction contract support and risk management.
planning exit strategies and implementation.
Get in touch
If you would like to speak with a member of the team you can contact us on: