£2.56m deal towards conversion of warehouse site to residential use
Octopus Real Estate, part of the London-based Octopus Group, has agreed to provide a finance package towards the conversion of a 13,436 sq ft commercial property in Manchester to residential use.
The recipient of the 18-month refinance and development facility is Charlotte Street (Manchester) Ltd, a special purpose vehicle (SPV) company owned by an experienced property developer.
The site benefits from planning permission for residential conversion of the top four floors of the building to include one one-bed apartment, nine two-bed apartments and two three-bed apartments.
The planning permission also enables planning uplift to be taken into the deal structuring to provide the developer with 60% loan to gross development value.
The site presently comprises a partially-let five storey Grade II-listed building with vacant warehouse space on the top three floors.
As part of the transaction, commercial leases on the first floor have been surrendered and the ground and basement leases will remain in place.
Located on Charlotte Street, nestled between Spinningfields and the Northern Quarter, the site benefits from its desirable Manchester city centre location, with Manchester Piccadilly station only a short walk away.
Gavin Eustace, head of residential development at Octopus Real Estate, said: “As this site involves a commercial and residential development element, we leveraged the experience of our specialist commercial and residential development teams to structure the loan in a way that suited the client’s needs.
“We have identified the core cities of the North as locations with significant growth potential and we are fully committed to supporting developers and property investors in these cities.”
Tom Frank, from York-based Ice Cubed Commercial Finance, acted as the adviser.
He said: “This project is yet another example of bringing one of many stunning disused buildings in central Manchester back to life.
“We were delighted to be instructed to facilitate the funding requirements of the project.
“We have worked with Octopus Real Estate on a number of projects this year and after assessing a number of funding options we moved forward with Octopus Real Estate as the team offered the best blend of terms, structure and, most importantly, service.
“The project was not without its issues, but between ourselves and the dedicated team at Octopus Real Estate we were able to resolve these and deliver for the client.”