Arc & Co has structured a debt and equity funding package for a £40m purpose-built student accommodation scheme in Bristol.
The 135-bed development will be funded through a circa £26m senior development facility from Downing LLP, alongside a preferred equity investment from Hame Capital.
The package, arranged in a strategic joint venture with sponsor Colico Living, has been structured at approximately 68% loan-to-gross-development-value and 77% loan-to-cost.
Arc & Co said the facility is intended to support the delivery of the scheme through to completion and stabilisation.
The advisory work was led by Corey Dennis, senior broker at Arc & Co, and took more than a year to complete.
The firm said the transaction involved a selective capital markets environment, valuation challenges and a redraft of the planning application to address amenity space requirements before approval was secured.
Dennis says: “This was a complex, multifaceted transaction given the scale of the project and the extensive planning process. We carefully structured the funding package to ensure the scheme was fully capitalised while supporting the sponsor’s overall strategy.
“It was about finding that specific alignment between Downing and Hame Capital that truly recognised the project’s long-term value.”
He adds: “We are seeing a market shift where developers are moving towards asset stabilisation over disposals, due to the slower sales market, which naturally impacts liquidity.
“In this environment, success depends on having a partner who understands the nuances of the entire capital stack and which senior and equity partners to approach. That depth of specialist knowledge played an important role in delivering the transaction.”
Will Powell, investment director at Downing, says: “We were delighted to close this significant funding package for an experienced and capable sponsor delivering a well-designed student scheme in central Bristol.
“The financing came with a number of complexities concurrent with this type of deal, and we are looking forward to seeing the project progress over the coming months. A big thanks to all involved.”
The development is positioned to serve Bristol’s two universities and is now expected to progress through Gateway 2, with construction due to begin in early 2027.
Scott Harvey at Hame Capital and Powell at Downing LLP were also involved in the transaction.
