Specialist property lender Octopus Propert will provide an 18 month, senior debt facility of over £20 million to London-based developer Ktesius Projects, to build 70 residential units in Brighton.
They have started building the seven storey building, which will be U-shaped in design and have a landscaped central courtyard. It will contain one, two and three bed residential units, and ground floor commercial space.
The scheme approved in January but isn’t expected to be complete until late 2019. It has a gross development value of over £35 million, with individual units priced from c. £295,000.
Emma Burke, head of development origination at Octopus Property, said: “This significant loan, provided to an experienced residential developer, fits perfectly with our strategy of quickly taking on complex situations and providing attractively priced products.
“Our talented team was able to structure the deal to suit Ktesius Projects’ requirements, providing funding on a deferred mezzanine position and a VAT bridge.
“Whilst political and economic uncertainty affects the wider real estate market, debt financing remains relatively cheap.
Located in the Valley Gardens Conservation Area, one of the town’s most desirable neighbourhoods, the former Brighton Astoria Cinema is just a short walk from the historic Brighton Palace Pier.
Burke added: “Coupled with the favourable demand supply dynamics supporting residential investment and development, we are confident that the increasing demand for specialist lenders that are able to deliver a market-leading product, with first class customer service, leaves us extremely well-placed to continue growing the loan book.”
The scheme will offer residents access to a communal gym, TV room, locker storage, community room as well as 72 bicycle racks. Unit completion is expected in late 2019.
The development offers views across Victoria Gardens public park and is close to Brighton train station, providing access in 30 minutes to Gatwick Airport and London Victoria in one hour.
Ken MacRae, chief executive of Ktesius Projects, added: “This is one of the most exciting projects we have undertaken to date, taking an historic building and developing it into much-needed residential units in one of the most desirable parts of Brighton.
“Finding a lender who fully understood our deal requirements from the outset was vital, and working with Octopus has been a truly collaborative process.
“We are committed to growing our residential portfolio across the South East into 2018 and look forward to the opportunity to work with Octopus again.”
Arc & Co., the specialist asset finance advisory company based in Mayfair, London, acted as broker.