Development lender provides record £74m loan for “highly sustainable” York residential scheme

Silbury Finance, the Oaktree Capital Management-backed development lender, has provided a £73.8m senior debt facility to North Star Investment Management to fund the development of a residential-for-sale scheme in York.

The 30-month, 73 per cent LTGDV facility is the largest loan London based Silbury has originated to date. It will fund the remediation phase and subsequent construction of a 215 flat scheme on the Gas Works at Heworth Green site, in a prime city centre location.

In line with Silbury’s commitment to funding real estate schemes that meet the highest environmental standards, the facility includes a discount on the exit fee if North Star meets certain sustainability criteria, including a minimum high B EPC rating.

Known as The Gas Works, the scheme, which is expected to complete in 2024, will be built to the highest sustainability standards with best-in-class amenities and tenant wellbeing at its centre.

Comprising a mix of one, two and three bed apartments, across three towers, features will include an onsite gymnasium offering studio classes, flexible workspace and an abundance of outside space, including an edible garden where residents can grow their own fruit and vegetables.

The site forms part of the wider Heworth Green Gas Works site and is ideally located just a short walk from York city centre, whilst York railway station is a 20-minute walk.

Following this transaction and the £100m of financing announced last week, Silbury has now provided over £430m of development finance across the UK residential-for-sale and retirement living sectors in 18 months, of which £190m is sustainability linked.

Gavin Eustace, founding partner at Silbury Finance, commented: “Despite the wider market volatility and threat of a recession, the fundamentals underpinning the UK housing market remain highly compelling.

“In particular, we anticipate continued demand for regional schemes around high growth urban centres, which are priced sensibly and that benefit from excellent infrastructure connectivity.

Paul Ellis, director of North Star, added: “This is a complex site that had been vacant for over 20 years, which has required us to work with highly experienced partners, including Silbury Finance.

“The team’s deep knowledge of the UK regional residential market and ability to structure bespoke facilities means the delivery of what will be a highly sustainable and much needed residential scheme is a step closer.”

By Matthew Neville – Correspondent, Bdaily