Silbury Finance provides £43m of sustainability-linked funding for Aldgate and Bath developments

By Bridging Loan Directory 25th January 2022

Silbury Finance (“Silbury”), the development lender backed by Oaktree Capital Management, has provided two senior loans, totalling £43 million, to fund the development of two residential schemes in Aldgate and Bath.

Reflecting Silbury’s commitment to funding new developments that meet the highest environmental standards, both loans include a discount on the exit fee for the borrower if the schemes meet certain sustainability criteria.

In Aldgate, EC1, Silbury has provided WMG Aldgate Ltd with a 34 month, £23.8 million development loan, at 63% Loan to Gross Development Value (“LTGDV”).

The facility will fund the construction of a 17-storey tower comprising 49 residential units and 2,850 sq ft of commercial space, which will be delivered by Unique Property Group.

The scheme will incorporate the latest in sustainable building design and is expected to complete in H1 2024.

The sought after Zone 1 location is less than five minutes’ walk from Aldgate tube station, with London Bridge railway station also nearby.

In Bath, Silbury has provided a 30 month £19.3 million loan for the development of 95 one, two and three bedroom homes for sale.

Occupying a prominent riverside location on the edge of the city centre, the development is expected to complete in early 2024 and will also include a flexible workspace offering and gym.

Having launched in January 2021, Silbury has enjoyed a strong first year, providing over £240 million of senior development financing across eight loans in the UK retirement living and residential sectors.

In November it announced the provision of a first, £40 million, sustainability-linked loan, for the UK Retirement Living Fund, which is managed by Schroders Capital and advised by Octopus Real Estate.

Gavin Eustace, Founding Partner at Silbury Finance, commented:

“Despite ongoing macro-economic uncertainty, the UK residential market enjoyed a stellar 2021, driven by a chronic demand supply imbalance, the favorable borrowing environment and the ongoing appeal of home ownership. In particular, schemes with strong ESG credentials in submarkets with good connectivity and which appeal to a diverse demographic will be the focus of our origination.

Sponsor strength is a key criterion in our lending decisions, and both C-Group Developments and Unique Property Group are established developers with a proven track record.

With significant funding capacity we continue to screen a wide range of opportunities, with a particular focus on larger developments, a part of the market remains underserved by debt providers.”

Sonny Gowans, Managing Director of Unique Property Group, said:

“Silbury were fantastic to work with and we are glad to have partnered with them on this project. We required a bespoke facility reflecting the multi-phased nature of the scheme, which Gavin and the team were able to structure, reflecting their experience and deep sector knowledge.”