A £74m funding deal has been agreed to bring forward a major residential development on the site of a former gasworks in York.
Ice Cubed Property Finance has completed a £73.8m development facility with Oaktree-backed lender Silbury Finance for North Star, which is behind the Gas Works scheme.
The finance deal has been struck to fund remediation and subsequent construction of the 215-flat scheme.
The Gas Works is expected to complete in 2024 and will comprise a mix of one-, two- and three-bedroom apartments, across three towers. Features will include an on-site gymnasium offering studio classes, flexible workspace and outside space, including an edible garden where residents can grow their own fruit and vegetables.
The site forms part of the wider Heworth Green Gas Works site and is located close to York city centre.
The deal includes a package to incentivise and reward sustainable development. A discount on the exit fee has been agreed if North Star meets certain sustainability criteria, including a minimum high B EPC rating.
Paul Ellis, director at North Star, said: “This is a complex site that had been vacant for over 20 years, which has required us to work with highly experienced partners, including Ice Cubed Property Finance and Silbury Finance.
“The team’s deep knowledge of the UK regional residential market and ability to structure bespoke facilities means the delivery of what will be a highly sustainable and much needed residential scheme is a step closer.”
Since it was established in 2017, Ice Cubed has worked on numerous projects across York, Leeds, Birmingham, London, Leeds, Sheffield and Manchester, including the new Malmaison hotel in York, The Roman Quarter in York, a residential development project in Kelham Island, Sheffield, and a strategic joint venture to deliver a Carbon Net Zero Apart Hotel chain.
Tom Frank, managing director of Ice Cubed Property Finance, who advised on the deal, said: “I am delighted to have supported on this major deal over what is a landmark development in central York. We have supported the vision for the Gas Works, a landmark city centre redevelopment, since Heworth Green Developments acquired the site, and it is fantastic to see the final piece of the jigsaw come into place and to ensure this scheme can become a reality.
“While the journey has had its challenges, we have achieved our objective working closely with the client and Gavin and his team at Silbury. We are especially proud of the sustainability element of the loan, and it is something that has become a main pillar in our financial architecture ethos.”
Gavin Eustace, founding partner at Silbury Finance, added: “Despite the wider market volatility and threat of a recession, the fundamentals underpinning the UK housing market remain highly compelling. In particular, we anticipate continued demand for regional schemes around high-growth urban centres.
“We have now arrived at a point where high environmental standards for residential development are a given, from the design and construction phases onwards. Sustainable real estate is embedded in our DNA at Silbury, reflected by the increasing percentage of our loan book that has a sustainability linked element, and we will continue to play our part in mitigating the effects of climate change.”
