£18.3m deal to support major city brownfield development
Specialist real estate lender and investor Octopus Real Estate will provide Heworth Green Developments, under the North Star banner, with an £18.3m facility secured against a major development site in York.
The 8.95-acre former National Grid site, off Heworth Green, has planning consent for 607 homes, as well as consent for retail or community use floorspace.
The facility will be used to refinance current debt, acquire the remaining part of the site, and finance the ground works and removal of a decommissioned gas holder.
Work will start on the development later this month with the remediation and infrastructure works, allowing the construction of the new homes on the site to follow this.
The site is part of a major brownfield development close to amenities – just north of York’s city-centre, a short walk from York Minster and a 25-minute walk from York Railway Station.
The £18.3m facility is the next funding milestone in the £85m GDV development journey. A large part of the site will be for Build to Rent homes, with the remaining 215 homes being developed by North Star for the open market.
Ludo Mackenzie, Head of Commercial Property at Octopus Real Estate, which is part of Octopus Group, said: “The Heworth site is one of the largest residential development opportunity in York. It has taken many years to get to a position where works can commence, and we are proud to be involved.”
A spokesman for North Star said: “Securing this funding deal is another major milestone in the project.
“The journey to transform this large, brownfield site into a vibrant new community has taken over 18 months so far and we are very excited to see it now coming to fruition.
“This will now enable us to start construction works on the site, and the first step will be to remediate the site which will start very shortly.
“Our aim is to create a high-quality sustainable development that York can be proud of and we are committed to delivering the development, even in these challenging times.”
Tom Frank, from Ice Cubed Commercial Finance, acted as the adviser.
Frank said: “Arranging the finance on this development has been complex, especially in the current challenging conditions.
“Successful closing of the deal is testament to our close relationship with Octopus Real Estate and the client.
“We are very proud to play our part in delivering this fantastic high-quality development so close to our York office.”
