Hampshire Trust Bank (HTB) has provided a developer of modern care home and assisted living facilities with a £7.4 million loan for a development in Shipley, North Yorkshire.
The facility will fund the development of 56 apartments for occupation by over-55s at a site known as Canal Works in Shipley.
The borrower had built a care home which was pre-let to an operator and sold to a fund. They obtained planning consent for the Canal Works scheme and the transaction was structured as such that the borrower provided the site and a modest sum of cash as equity. A trusted mezzanine provider HTB had worked with before delivered a mezzanine slice and the bank provided the senior facility of £7.45m.
Time was of the essence, as the borrower wanted their contractor to remain on site at the end of the care home construction and roll straight into the assisted living scheme. By doing this, the client could save in site set-up and preliminary costs.
The deal, which completed in February, provided an overall facility for 65% Loan to Gross Development Value, with the project commanding a total Gross Development Value of £11,445,000. Works have now commenced on site and completion is due to be achieved in mid-2024.
Martin Hutson, managing director of Torsion Care, said: “We are delighted to have closed our second development facility with HTB. The team there have a great understanding of the retirement living space, are supportive and flexible to achieve the funding stream required. My thanks to the HTB team for their help to close out the finance on this development.”
Harry Bhogal, lending manager, development finance, Hampshire Trust Bank, added: “Later living is an interesting sub-sector of the market. The UK has an aging population and yet this sector of the housing market is currently under-supplied and dominated by one firm. I worked closely with the client and our professional team to understand the supply and demand dynamics, the level of specification required in the later living sector and also the costs.
“The scheme is yet to be built but credit approval and on-boarding was successful because we took time to understand the borrower’s business. We carried the confidence of the bank’s Credit Committee and employed a well-regarded, local professional team to advise us.”
Neil Leitch (pictured), commercial director for development finance at Hampshire Trust Bank, said: “We look forward to building on our existing relationship with Torsion Care and I am excited to see this development come to fruition.
“As HTB continues on our growth journey, we plan to expand further into later living and other connected sectors, in addition to funding core residential and commercial development. We will take the time to understand our borrower’s requirements with dedicated lending directors and portfolio managers appointed on each case to provide the level of service for which HTB are becoming known.”
