Mercia secures £32.5m to fuel student accommodation scheme

A £32.5m funding package will support the first phase of Mercia Real Estate’s 411-bed Purpose Built Student Accommodation (PBSA) scheme in Edgbaston.

The funding from Paragon Bank’s Development Finance division will be used to refinance an existing land loan on the two commercial units occupying the site and start converting the first site to student accommodation.

Located on 12 Calthorpe Road in Edgbaston, the existing office complex contains two buildings connected by a link block. Previously used as offices by HSBC, one of the units will be converted into a 266-bedroom student accommodation scheme, with the other proposed as a further 145 bedrooms, currently being submitted into planning.

Work has already commenced on the initial phase and will be complete by September 2026, enabling students to move in for the 2026/2027 academic year.

This deal was led on behalf of Paragon Bank by Senior Relationship Director Simon Dekker and Portfolio Manager Izzy Sargeant.

Since Paragon Development Finance launched its PBSA proposition, it has lent £216m for PBSA schemes across major cities in the UK, including London, Nottingham, Glasgow and Birmingham, funding 3,362 rooms in total.

Samuel Clark, founder and CEO at Mercia Real Estate said: “We will be soon launching our student brand in our inaugural PBSA project in Edgbaston which will enable us to showcase our unique take on high-quality accommodation to students in Birmingham in time for the 26/27 academic year.

“It was a pleasure working with Simon and the Paragon team up and we are looking forward to utilising their support to build out our development pipeline and working on this project together.”

Simon Dekker, senior relationship director at Paragon Bank said: “It’s been a pleasure to work with Samuel and the Mercia Real Estate team on this exciting new scheme in Birmingham.

“We’re seeing more and more demand for high-quality student accommodation and were delighted to be able to refinance the site and provide funding for the project to start.”