Avamore Capital has completed a complex refinance and remediation facility to support essential external wall repairs at a 157-bed purpose-built student accommodation (PBSA) scheme with ground-floor retail.
The borrower, an experienced property investor and developer, acquired the asset in 2024 with a B2 external wall rating that required upgrade works to meet current fire safety standards.
The £5m facility refinanced the existing debt and fully funded the remediation programme.
The scheme carries an expected gross-development-value (GDV) of £9,300,000 once works conclude, with the borrower appointing a specialist contractor and professional team to deliver the upgrades.
The transaction involved several structural hurdles. Works could not begin until the remediation plan was submitted to the Building Safety Regulator, creating a fixed lead-in period.
The borrower intended to use the Injecta-Clad system rather than undertake a full re-clad, a more cost-effective approach but one that introduced additional uncertainty while approvals were pending.
Valuation was complicated by high operating expenditure, including a waking watch imposed due to elevated fire risk.
Estimated build costs also rose from £1,000,000 to £1,600,000 to allow for the full re-clad option, prompting the borrower to commit additional shareholder equity.
Avamore worked with the borrower to create an interest service schedule aligned with the asset’s monthly cashflow.
Avamore facilitated a restructuring arrangement that allowed the existing lender to defer part of the outstanding balance, subject to an agreed deed of priority.
A permitted payment mechanism was incorporated to enable the borrower to progress with the Injecta-Clad solution once approved, unlocking a potential cost saving of around £600,000.
With the deal already under time pressure following a previous lender’s withdrawal during the legal process, Avamore expedited underwriting and accepted a retype of the existing valuation to maintain momentum.
Ed Blundell (pictured), head of underwriting at Avamore Capital, said: “This deal required a genuinely collaborative approach and a willingness to engage with a specialist remediation strategy that fell outside the scope of a typical development loan.
“Our priority was to structure a facility that provided certainty, flexibility, and enough time for the borrower to navigate regulatory approvals without unnecessary pressure.
“It’s a strong example of how Avamore can support experienced developers through complex, time-sensitive situations while still maintaining a robust credit position.”
