Glenhawk has completed an £11.7 million loan to refinance a newly developed purpose built student accommodation (PBSA) scheme in Aberdeen.
The short-term lender structured the facility to replace the borrower’s existing development finance, providing additional time to implement its business plan and appoint a new managing agent, while seeking to increase both occupancy levels and rental income.
The scheme is described as high quality but is currently operating below full occupancy. Glenhawk said the under-occupation was through no fault of the borrower, and that a clear plan is in place to drive lettings and stabilise performance.
As part of the transaction, the lender agreed a two-year term with a bespoke interest structure designed to align with anticipated letting uplifts, offering flexibility around interest payments while income levels improve.
Chris Daly (pictured), managing director, structured real estate at Glenhawk, said: “This was a complex case that required a flexible, understanding approach.
“The borrower needed to work with a lender that has experience within the PBSA sector, and can get to grips with the nuances and unique challenges this form of investment can provide.
“Not only that, they needed a lender able to deliver a bespoke funding structure which took into account the individual elements of the case, and sets them up for success in enacting their business plan.
“With deals like this, it’s vital for brokers to be able to work with lenders who are able to dig into the details, build a broader understanding of the borrower and what they are trying to achieve, and then deliver a funding structure which truly works for all parties.
“That approach is what we have become known for at Glenhawk, and is helping us to become a go-to lender for less straightforward cases.”
The transaction underlines continued lender appetite for operational real estate assets, including student accommodation, where cashflow profiles may be in transition but longer-term fundamentals remain intact.
