Silbury Finance provides £96 million funding for two residential developments

This includes a £68 million loan for mixed-tenure redevelopment

Silbury Finance provides £96 million funding for two residential developments

Development lender Silbury Finance has completed two senior development facilities, totalling £96.5 million, to fund the delivery of residential-for-sale schemes on the Old Kent Road and in Reading.

Silbury has provided London property developer Avanton with a £68 million stretch facility. It will fund the redevelopment of the former Carpetright warehouse into 262 mixed tenure flats, including 92 units, across two towers, at Avanton’s landmark regeneration project on the Old Kent Road, known as The Ruby.

Construction of the sustainable scheme will commence in September, with the first homes ready for residents in the second half of 2024 and the remainder in the early part of 2025.

In the 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 the second half of 2023.

Founded in 2020, Silbury is backed by Oaktree Capital Management and provides flexible development funding solutions, typically between £10 million and £150 million, across the UK living sector, including build-to-sell, build-to-rent, purpose-built student accommodation, and retirement living.

Following these transactions, Silbury has now provided nearly £335 million of development finance across the undersupplied UK residential-for-sale and retirement living sectors in under 18 months.

Read more: Former Man Group and Octopus Real Estate execs launch Silbury Finance.

“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,” Gavin Eustace, founding partner at Silbury Finance, commented.

“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.”

According to Omer Weinberger, chief executive at Avanton, securing the £68 million finance package is a major milestone for their Old Kent Road ambitions.

“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,” Weinberger stated.

Deepak Khullar, managing director of Kings Oak Capital, said the support from Silbury Finance would allow them to deliver 110 apartments in a location where demand has continued to outpace supply.

“The scheme is well located for residents and will benefit from the newly opening Crossrail Line, with the mainline station on the doorstep of this site,” Khullar pointed out. “The conversion of office buildings continues to be a sustainable way to combat the housing crisis and we are excited to bring this project to fruition. Silbury were a pleasure to deal with and worked with us to bring this matter to a swift conclusion every step of the way.”

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