Silbury Finance, the Oaktree Capital Management-backed development lender, has completed two senior development facilities, totalling £96.5 million, to fund the delivery of residential-for-sale schemes on the Old Kent Road, SE15, and in Reading.
Silbury has provided Avanton, the London property developer, with a £68 million stretch facility. It will fund the redevelopment of the former Carpetright warehouse into 262 mixed tenure flats, including 92 affordable units, across two towers, at Avanton’s landmark regeneration project on the Old Kent Road, known as The Ruby.
Offering residents panoramic views over the London cityscape, construction of the sustainable scheme will commence in September, with the first homes ready for residents in H2 2024 and the remainder in the early part of 2025.
In a second transaction, in Reading, Silbury has provided Kings Oak Capital with a £28.5 million acquisition and development loan. The 24-month facility, at 69% LTGDV, will support the borrower’s conversion of an office block, formerly the UK headquarters of Three, into 110 flats, with the construction phase expected to complete in H2 2023.
The 2.6-acre site occupies a prime central Reading location, benefitting from its proximity to Reading Station, where Crossrail services commenced earlier this year, as well as views of the River Thames.
Following these transactions, Silbury has now provided nearly £335 million of development finance across the critically undersupplied UK residential-for-sale and retirement living sectors in under 18 months.
Gavin Eustace, founding partner at Silbury Finance, commented: “Against a backdrop of high inflation and rising interest rates, the UK urban residential sector continues to demonstrate its defensive characteristics and remains one of our conviction calls.
“These schemes in particular have been designed with resident wellbeing at their centre, occupying high growth urban neighbourhoods with an abundance of green space, and benefitting from excellent infrastructure connectivity. As we remain on target to reach half a billion pounds of lending by the end of 2022, we will remain highly disciplined, targeting structurally undersupplied sectors and partnering with experienced developers with a track record of delivering successful projects.”
Omer Weinberger, CEO at Avanton, added: “Securing this finance package is a major milestone for our Old Kent Road ambitions, where we are delivering a range of housing types to meet the urgent need of Londoners. The Silbury team have deep experience in this part of the market, which now more than ever is critical, and we look forward to growing the relationship.”