DRC Capital has provided a £11.4 million loan to Essential Living, a London-based developer and operator of private rented sector residential property.
The two-year loan is intended to refinance Essential Living’s equity in a West London development site which it recently bought for £16.25 million. The firm bought the 1.6-acre site at 228-246 High Street in Brentford last September. The loan has a one-year extension option.
Essential Living intends to develop the site as 180 flats for rent plus ground floor shops. A planning application is expected to be submitted later this year.
Essential Living was launched in 2012 and aims to develop 5,000 private rented residential units in London and the South East over the next ten years. It has an initial £150 million of equity funding from real estate principal investment firm M3 Capital Partners which it is using to acquire sites.
The firm has eight sites across its target region and has recently secured planning consent for the 200-unit Theatre Square scheme in Swiss Cottage and the 550-unit Perfume Factory in Ealing. Its first scheme to complete will be Vantage Point in Islington, which contains 118 apartments above Archway tube station. Vantage Point is under construction and due to open in July.
“The build to rent sector, as an emerging asset class, is something we see much potential in,” said Dale Lattanzio, managing partner at DRC Capital.
“We are delighted to be partnering with Essential Living on its Brentford scheme which, like many of the company’s projects, is ably foretelling an upswing in the local market driven by a variety of factors. We see this as a superb opportunity to support the growing build to rent sector and look forward to securing further such deals,” he added.
“There is a strong appetite for lending to build to rent and we have been able to secure competitive terms from DRC that support our long term investment strategy to deliver 5,000 homes for rent across London and the South East,” said Robert Hill, finance director at Essential Living.