Student apartments take broker and funder into new territory
The pairing of Secure Trust Bank with a multi-million-pound student accommodation development project is the first such funding deal in Scotland for both Goodman and Secure Trust.
The project to build 146 student apartments in Edinburgh is being developed by Hillstone Developments. “We had an industrial site in an area that was becoming increasingly residential,” explained owner Paul Hepburn. “We wanted to increase the value of the site and turn it into something more appropriate for the area.”
Paul was able to secure planning permission for the project but when he began looking for finance among the mainstream banks in Scotland it proved difficult to find. Goodman Corporate Finance offered a solution.
“Goodman took a look at the project and looked at the funding we needed,” said Paul. “They came up with two or three potential funders and we began negotiations with Secure Trust.”
The right funding package for a complex deal.
Robin Daw, Associate at Goodman Corporate Finance, said: “As a Russell Group city Edinburgh University is hugely important to the Scottish economy and the local authorities are very much in support of new custom student accommodation developments. We could see this was a strong project proposal and wanted to make sure the right funding package was in place. It was a complex deal but we knew that Secure Trust were looking for large funding opportunities and that they were keen to expand into new areas.
“I’m delighted that we were able to put together a package that really fits what Paul needed, and that we were able to bring Secure Trust into Scotland for the first time. At the moment there aren’t many lenders who are able to fund large schemes in Scotland, but we have more than 200 funders available to us and so can access a huge range of flexible funding options to come up with the right match for each client. We hope this will be the first of many new opportunities north of the border.”
David Cunningham, Head of Real Estate Finance, North at Secure Trust Bank, said: “This funding deal was our first venture in Scotland and builds on our growing capability in the purpose-built student accommodation sector, where we have a real appetite for good schemes. We worked closely with Goodman Corporate Finance in structuring the funding, which has enabled Hillstone to develop a brown field site. We are looking to do many more schemes in Scotland”.
A smooth process, from start to finish
“The whole negotiation and arrangement process was made much easier by Robin Daw and Goodman Corporate Finance,” said Paul. “They stayed involved in the process right the way through to make sure everything went through smoothly. They were available out of hours and were very flexible, very committed and really very knowledgeable. They certainly went beyond just introducing us and worked closely with us on both sides to make sure we got the best deal and were happy with the security and all the details.”
Building work is now set to start in late spring this year, with the project due to complete in summer 2017 ready for the new intake of students in 2017/18.
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