Silbury Finance, the Oaktree Capital Management-backed development lender, has provided a £22 million senior debt facility to Stonegate Homes for the development of a 100-apartment scheme in Hove, East Sussex.
The 17-month facility, funded at 70% LTGDV, will support Stonegate’s transformation of a vacant office block into 100 flats for sale, arranged over seven floors.
The development is located on the outskirts of Hove. Property searches from prospective buyers for Hove increased almost seven-fold in 2021, making it the UK’s most searched for area, according to Rightmove data. The Brighton & Hove market is characterised by a shortage of available homes, which underpinned 9.6% annual house price growth between H1 2021 and H1 2022. Demand for the scheme, which is due to complete in late Q2 next year, has been strong, with 25% of the homes already reserved.
Gavin Eustace, founding partner at Silbury Finance, said: “Regional developers are the lifeblood of UK housing, a sector that remains one of our conviction calls given the structural undersupply dynamic. Despite the challenging backdrop, we will continue to fund well capitalised borrowers like Stonegate, which has a track record of delivering successful schemes across the South East.
“Furthermore, as a refurbishment rather than new development, the embodied carbon of this scheme will be greatly reduced, which aligns with our own commitment to delivering sustainable real estate.”
Jerry Hinds, founder and director of Stonegate Homes, added: “We are very pleased to have completed our development finance facility with Silbury Finance on our 100 unit residential development in Hove.
“The construction works are progressing well and we are aiming to deliver this first phase of the development in Q2 2023. The site is well located in the centre of Hove in close proximity to Sussex Country Cricket Club ground and we have had strong buyer interest in the site. We thank the Silbury team for their support on this project and look forward to working with them on future projects.”