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Crosslane Property Group:Development finance for student accommodation case study

Supporting British businesses

Crosslane has extensive experience in the purpose-built student accommodation sector and worked with Paragon on a 437-bed development in Sheffield.

The scheme on Scotland Street included a mix of studios and shared en-suite flats ranging from classic to deluxe, premium and superior to cater for students.

Reflecting on the site’s industrial heritage, the development, called ‘Brass Founders’ comprised of three residential blocks arranged in a horseshoe shape, creating a large, private open-air courtyard where residents could study, collaborate and socialise.

Location was key to this development, built within five minutes’ walk from the University of Sheffield International College and within 15 minutes’ walk of both the University of Sheffield and Sheffield Hallam University main campus.

Charlie Pogson, Director of Marketing at Crosslane, said:

“The team at Paragon had a strong appreciation of the purpose-built student accommodation market, within which we operate, and got to grips quickly with the unique nature of our business.

“They understood the key opportunities and challenges we needed to overcome and worked hard to recognise our needs, to create a bespoke solution to help us deliver our project – and the speed of execution by the team was impressive.

“We also liked the fact that they don’t use Loan Market Association (LMA) facility agreements to document bi-lateral loans.

“The loan was a great piece of capital that allowed us to complete the development on time and to budget. It felt like there was a real partnership during our dealings with Paragon. The team was quick and reliable.”

I like working with Paragon because of the LTV, speed of the deal and the fact that the team is easy to work with...

When the company approached the Development finance team, it had already purchased Rosebery House but wanted a pre-planning loan that would support IDM through the process of a planning application and then a further facility to see the development take shape.

Jonathon Curtis, from IDM, said: “Paragon impressed me with the smoothness of the transaction and the team understood the deal and our company’s approach.

“Paragon adapted with us as the planning strategy changed after the purchase. “I like working with Paragon because of the LTV, speed of the deal and the fact that the team is easy to work with. They are just great property people.”

The apartments with modern open plan layouts, contemporary kitchens and bathrooms quickly appealed to buyers and sold out.

How Paragon helped

We provided a £21.3 million facility with a GDV of 65% towards the development of Brass Founders, to form a 437-student bed new build scheme.

The works took just over a year to complete and Crosslane sold the site to an institutional buyer allowing the company to fully replay the loan. The development was fully let in year one and has remained so since.

With tenancies made available to students in Sheffield for 44, 50 or 51 weeks and a range of options to meet different budgets, this is a perfect example of our student development finance offering.

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Paragon Bank PLC is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Registered in England number 05390593. Registered office 51 Homer Road, Solihull, West Midlands B91 3QJ. Paragon Bank PLC is registered on the Financial Services Register under the firm reference number 604551