United Trust Bank (UTB) has provided a £5m bridging facility to McLaren Property as the developer considers revisions to a student accommodation scheme in Leeds with a projected gross development value (GDV) of £74m.
The 12-month loan refinances existing acquisition debt secured against Springfield House, a Grade II listed building on the University of Leeds campus, and releases additional equity for the developer.
The facility represents 63% loan-to-value against the property’s current valuation of £8m and was introduced by Alex Maxwell-Scott, co-founder and partner at Ardant Partners.
McLaren Property acquired the former office and medical building in 2023 and subsequently obtained planning permission to develop 334 purpose-built student accommodation (PBSA) beds.
The site is situated next to Leeds General Infirmary, within the university’s main campus.
FUNDING NEXT STAGE OF DEVELOPMENT
McLaren is now assessing potential changes to the consented scheme, including improvements to the building’s layout and student accommodation offering, before proceeding with construction.
The bridging finance provides time to develop those proposals while the company considers its longer-term funding arrangements. Options include securing a forward-funding partner or arranging development finance to fund construction.
The transaction was structured by Daniel Carlisle, senior director – property development at UTB.
James McMillan, finance director at McLaren Property, says: “This exciting scheme has enormous potential and will deliver much needed high-quality student accommodation to the area.
“With the original planning consent in place, we wanted additional time to look carefully at how we could further optimise the scheme before moving into the development phase.
“The facility from United Trust Bank gives us the flexibility to progress those plans and consider the most appropriate funding route for the next stage.”
McLaren Property, McLaren Living and McLaren Regeneration have a combined development pipeline of £4.6bn across 36 sites, comprising approximately 12,000 homes.
BRIDGING FINANCE PROVIDES FLEXIBILITY
Maxwell-Scott says the transaction required a lender willing to assess both the existing security and the proposed development.
He says: “The key requirement here was finding a lender which understood both the current position and the considerable potential of the site. UTB quickly grasped what the client was looking to achieve and structured a suitable facility.
“Daniel and the UTB team took a pragmatic and commercial approach throughout and worked closely with us to get the refinance completed smoothly.”
Carlisle says the transaction demonstrates how development bridging can be used between site acquisition and the commencement of construction.
He says: “This is a great example of where a development bridge can give an experienced developer the time and flexibility they need to maximise the potential of a site rather than rushing into the next stage of a project.
“Our facility gives them the breathing space to finesse those plans and determine the best route forward.
“It’s also exactly the sort of transaction our new real estate finance division was created to support. The breadth of our expertise allows us to look at what a customer is ultimately trying to achieve and provide appropriate funding across different stages of the project lifecycle.”
