Two North East property companies have sealed finance deals worth a combined £24.5m from finance group Shawbrook.
Newcastle investment fund Develop North PLC, which provides loans to property developers in the North of England and Scotland, has renewed a £6.5m debt facility from Shawbrook for a further two years. The fund, which is managed by wealth managers Tier One Capital Ltd, will use the facility to continue its support for residential and commercial property developments.
It said the funding represents Shawbrook’s ongoing backing for its strategy to support the levelling up of the North through alternative lending to deliver high quality property schemes. Since its launch in 2017, the London Stock Exchange-listed Develop North fund has supported the development of 33 residential and commercial projects, with a combined value of £70.3m and an estimated £184m Gross Development Value (GDV).
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Brendan O’Grady, fund manager at Tier One, said: “We are proud to continue the ongoing positive relationship with Shawbrook’s speciality finance team. The renewal of the revolving credit facility for the sixth year recognises the continued support the fund has from its lender as a credible and growing alternative lending source for property schemes in North East England and Scotland.
“Alongside our existing portfolio of loan facilities across 17 projects, we have a strong pipeline of future investment opportunities that will contribute to the development of new homes and commercial premises. With the assistance of Shawbrook we will continue to offer a bespoke finance provision to developers that meets the investment objectives of our shareholders.”
Phil Risby, director, speciality finance at Shawbrook Bank, said: “Develop North has a strong management team and a great business strategy. Having worked with them for a number of years now and built up a good relationship, the renewal of the facility for an extended term was a natural transaction. We look forward to seeing the upcoming projects that Brendan and his team support, come to life as well as assisting with future opportunities for developers.”
Meanwhile in Durham, Three Tuns Development Ltd – a joint venture between professional property developers Simon Williams and Andrew Ward – has secured £18m funding with backing from Shawbrook.
The company acquired historic hotel the Three Tuns, which had served as student accommodation for Durham University students after it was bought from former owners Swallow Hotels, back in 2016. Since then, the new owners owners have redeveloped the building to boost the number of rooms for students, renovating it while also adding three new, purpose-built student accommodation blocks within the hotel grounds.
Shawbrook has facilitated an £18m funding package which includes a £10m development exit loan and £8m capital raise for future investment plans. The deal was completed in partnership with Franklin Commercial Finance, part of Synergy Commercial Finance.
Dylan Bleasdale, business development manager at Shawbrook, said: “We’re thrilled to get this deal over the line and support Three Tuns with some interesting and much-needed developments. Given the scale and type of asset, this was a complex process, and the support of Franklin Commercial Finance was key. After a high street lender turned away this client, we are pleased we were able to overcome the complexities of the deal and offer a bespoke funding package to deliver their investment mission.
