Specialist property lender Octopus Property will provide international property group Strawberry Star with a £10m 12-month loan to help acquire 110,000 sq ft of retail space in Harlow, Essex.
The borrower has secured planning consent to demolish the property and build 447 residential units, a mixture of for sale and private rented sector.
Ludo Mackenzie, head of commercial property at Octopus Property, said: “It is a pleasure to work with repeat borrowers, particularly those like Strawberry Star with a reputation and track record of success.
“We are seeing an increasing number of opportunities to finance schemes where borrowers have recognised the potential to extract value from change of use, whilst at the same time playing a key role in the placemaking process that is underway in many urban centres across the UK.”
Santhosh Gowda, chairman, Strawberry Star Group, added: “We are securing opportunities for our volume housing vision aimed at offering London lifestyle homes in the commuter belt towns.
“Harlow, as one of the leading regional housing markets, is an important addition to our development pipeline. Our mixed-use development Lu2on in Luton just won the prestigious First Time Buyer Award 2019.
“We plan to create many such outstanding developments with the support of organisations like Octopus Property, who are aligned with our volume housing vision.”
Part of the Harvey Shopping Centre, Harlow’s premier retail destination, the property, comprising three buildings, is currently let to 39 tenants, with the majority let on short leases.
Alongside the residential units, comprising a mix of studio, one and two bed homes, the scheme will deliver 43,200 sq ft of ground floor retail, across four separate blocks.
This will be the eighth time that Octopus Property has funded Strawberry Star, other deals have supported commercial acquisitions, refinancings and a VAT loan.
The funds are being provided by Octopus Property’s commercial real estate debt fund II, which has funded a number of significant recent deals across the UK.