Maslow Capital, the UK-based real estate development finance specialist, looked to the UK’s regional markets in June as it clocked up its highest ever monthly lending volume.
The firm, which was founded in 2009, is capitalising on the “growing demand” for alternative financing from regional developers, after providing £100 million (€112.8 million) across four loans in June, co-founder Ellis Sher told Real Estate Capital.
“We’re continuing to see more and more opportunities across cities in the north and in Scotland – with Manchester and Glasgow [being] two prime examples,” Sher noted.
Maslow’s June financings backed three new residential developments in Manchester and a student accommodation project in Glasgow, delivering 836 new apartments along with 286 student beds.
The largest financing was a £40.2 million loan with a 1.5-year maturity to fund the ‘Trinity Way’ development project, which will offer 383 residential units in Salford, Manchester.
The specialist lender also provided a 2.3-year, £34.2 million facility to fund a residential development of 273 units in Coupland Street, near the university of Manchester. A building of 180 residential units on Derwent Street was also financed by Maslow with a £2.5 million loan, maturing at the end of November 2018. In Glasgow, the lender financed a student accommodation scheme of 286 units with a £19 million facility maturing in December 2019.
Maslow’s record month follows more than £200 million of new development loans so far in 2018; a 20 percent increase compared with the same period last year. The firm’s lending surge highlights increasing development finance volumes in the UK. New debt allocated to construction projects totalled £8.7 billion last year, representing a 13 percent increase on 2016, according to data from the latest Cass Business School report on UK real estate lending. Most of this finance was allocated to residential schemes, the report notes.
“In general, the price points of regional developments are supporting demand and good levels of liquidity,” Sher said.
“London presents a more mixed picture. Homes below £600,000 are demonstrating far better liquidity than homes above £1 million and so, whilst we do support new developments in London, we are quite sensitive to the product being delivered,” he added.
Maslow’s latest deals form part of the lender’s strategy to diversify its exposure – moving into different segments of the real estate market including residential, mixed-use and purpose-built student accommodation across the UK.
“In parts of the UK there continue to be shortages of housing and purpose-built student accommodation and we try our best to allocate capital where there is a favourable demand/supply imbalance,” Sher said.
“We have seen such imbalances in other aspects of the property market across commercial and specialist living, and these are sectors that we will be entering in the near future,” he added.