The lender closed a £2.2m acquisition bridge at 60.4 per cent loan to value (LTV) based on a purpose-built student accommodation asset in Coventry for a UK-based foreign national customer.
Philip Gould, senior underwriter for Avamore Capital, led the transaction. He said: “The borrower was under immense time pressure and so we worked very quickly to become comfortable with an asset type that we have not previously worked with.
“One of the most important things for us was the security of the exit; the scheme is currently 100 per cent occupied and has been so for the past 20 years which provides us with great comfort.
“Furthermore, the sale and lease back agreement with the university provided a secured cashflow in the medium term which will allow the borrower the necessary time to achieve their long-term aspirations for the property.”
The 12-month loan is secured against a 105-room accommodation block with communal facilities. The property was originally a YMCA hostel before being converted into student accommodation by the university in the 90s and it has now been sold to a private owner.
Avamore added the borrower had experience in the student sector, but noted that in the medium-term there was significant opportunity for refurbishment to improve the specification or there was potential for conversion into a hotel or private rented accommodation.