Octopus Real Estate completes £26m loan for sustainable homes in Leeds

By Bridging Loan Directory 6th December 2022

Octopus Real Estate, part of Octopus Group and a leading UK specialist real estate lender and investor, has provided a £26m loan facility to pioneering sustainable developer Citu as part of the second phase of Citu’s Climate Innovation District.

The development is a major pillar of the Leeds South Bank regeneration scheme – one of the largest regeneration programmes in Europe.

The Climate Innovation District will deliver over 900 high quality, low-carbon, energy-efficient homes.

The second phase of the development, funded by Octopus, will include 247 residential units – comprising 161 apartments, 69 houses and 17 affordable homes – as well as six commercial units.

These homes will sit at the foot of the award-winning bridge that connects the banks of the River Aire, and will be set amongst multiple climate-resilient public green spaces.

The loan provided by Octopus covers the refinancing of existing debt, and will fund the remaining construction costs, professional fees and associated costs required to complete and sell the units.

All the properties will be delivered using Citu’s own on-site manufacturing facility that produces a timber-framed component system of building, originally designed in collaboration with local Leeds Beckett University.

The completed units will include a Mechanical Ventilation Heat Recovery (MVHR) system which captures and recycles heat from the home.

The properties will also benefit from green roofs, rainwater collection, photovoltaic solar panels, and fully electric heating, with no gas boilers. Citu estimates that on average each home will save 4 tonnes of CO2 per year compared to traditionally built homes, plus around 60 tonnes of embodied carbon per home.

Nick White, Head of Development Origination, Octopus Real Estate, commented:

“This is exactly the kind of loan we want to be doing more of at Octopus Real Estate; supporting a regional housebuilder pushing the boundaries of sustainable development to deliver real change.

Citu’s Climate Innovation District is a model of how to economically build zero carbon neighbourhoods that create greener, healthier, smarter and better-connected cities.

At Octopus we are on a mission to reimagine real estate investment to create much-needed sustainable housing that is fit for the future and provides real social value to local communities.

The team at Citu are fully aligned with our goals, and we’re thrilled to help them realise the next phase of this innovative development.”

Chris Thompson, Founder, Citu, concluded:

“It’s essential that we change the way we live in our cities. At Citu we develop places that encourage and enable bold change, so we look for long-term funding partners that share this vision.

We are pleased to be on that journey with Octopus. Together, we’re building a legacy for the city of Leeds and proving that essential change is both achievable and deliverable for a better, lower carbon future.”