Avamore Capital takes first step into PBSA space with a £909K commercial bridge against Nottingham property


Philip Gould Avamore Capital

Avamore Capital has taken its first step into the PBSA space with a £909K commercial bridging loan against a Nottingham property.

The site currently consists of an unencumbered, semi-detached office building which the borrowers are looking to convert into student accommodation for students attending Nottingham Trent University.

The borrower – who has delivered over 2000 student beds across eight locations in the UK and has maintained a strong portfolio of similar developments – purchased the site in March 2023 for £2.4 million.

The purchase included approved planning to convert the site into 57 lettable bedspaces for Purpose Built Student Accommodation (PBSA).

Once the site was secured, the developer applied for enhanced planning to increase the number of bedspaces to 67.

The borrower initially approached Avamore for a development facility with a view to completing the scheme in time for the 2024 academic year.

However, due to  the outstanding decision on the enhanced planning application, the developer was not able to start works immediately.

Given the delay, and on the borrower’s request, Avamore was able to structure a commercial initial bridging loan in order to release equity from the property to aid the borrower’s operational cashflow requirements.

The structure relieves the completion time pressure and means that the borrower will be in a position to roll into a development facility quickly once planning permission has been granted.

This is Avamore’s first deal of a PBSA nature, with their main focus having previously been towards residential development and bridging loans.

Phil Gould, Chief Lending Officer at Avamore Capital commented:

“Given our extensive experience in heavy residential refurbishments and office-to-resi conversions, moving towards the PBSA space feels like a natural move.

We believe it gives us a solid foundation to be able to explore this area and look at adapting elements of our products, to give a wider net of developers more support.

It’s rewarding to be able to get behind strong sponsors, such as this one, allowing them to continue doing what they do best.”