- Client: UK National and Resident
- Property: Vacant hotel with planning to convert to 108-bed student accommodation
- Property Value: £11,100,000
- Loan Amount: £5,152,000
- LTV: 46%
- Term: 6 months
Enness was approached by a UK-based client seeking finance against a vacant hotel in a Scottish city centre. The property was valued at £11.1 million and had planning permission to be converted into 108-bed student accommodation. The location, close to a large university, presented a strong opportunity to reposition the property into a purpose-built student accommodation asset.
However, the client faced a time-sensitive refinancing requirement. The hotel had already been acquired using existing debt, which was expensive, and the client needed to refinance this facility while also providing additional funding to support the next stage of the conversion. The client was not yet ready to commence the next phase of development works, creating a need for short-term finance that could bridge the period before the wider development facility was required.
Student accommodation can present additional challenges for borrowers because lenders may have more limited appetite for specialist or large-scale schemes. Some lenders prefer smaller student accommodation projects, while others may require a proven track record or established trading history. The proposed conversion of a vacant hotel into a 108-bed scheme therefore required a lender comfortable with both the property and the intended use.
Enness approached specialist lenders with experience in large-scale student accommodation and identified a suitable financing route. Terms were secured for a £5,152,000 unregulated bridging facility, representing 46% LTV against the £11.1 million property value. The facility allowed the client to refinance the existing debt quickly while also raising a limited amount of working capital.
The lender was also prepared to consider providing a further tranche of funding once the client was ready to begin the conversion works. This created a flexible financing structure that could accommodate the different stages of the project rather than requiring the client to arrange separate facilities from the outset.
This case demonstrates how specialist student accommodation finance and bridging finance can be structured around complex property projects where timing, planning and the proposed exit all need to be considered. Enness can work with specialist lenders to identify finance suited to the individual property and development strategy.
If you are looking to refinance a property ahead of development or require finance for a student accommodation project, Enness can assess your requirements and explore suitable student accommodation finance and bridging solutions.
Risk Warning:
Bridging and development finance carries risks. Projects can experience delays, unexpected costs or changes in property values. If you do not meet the terms of the facility, the lender may take enforcement action against the secured property.
Disclaimer:
This case study is for illustrative purposes only and does not constitute financial, legal or tax advice. Finance is subject to status, underwriting, project assessment and lender criteria. Terms and availability will vary depending on individual circumstances and the proposed development.
Information contained in our case studies is for market and illustrative purposes only. In some cases, these may be made up of multiple cases and are for illustrative purposes only.
Some case studies are made up of enquiries that have come into the business, not all business completes, and the posting of a case study does not represent a completed piece of business.
Property values can fall as well as rise, and you may not get back the amount originally invested. Property investments can be illiquid and may take time to sell. Where borrowing is used, your property may be repossessed if you do not keep up repayments on a mortgage or other loan secured against it.
