Royal Bank of Scotland provided £22.75m of development finance for the £200m Stephenson Quarter office and leisure scheme at Central Station in Newcastle.
The RBS loan enables local developer Silverlink to build a Crowne Plaza hotel as part of the scheme’s first phase, which will be delivered in summer 2015. The loan’s maturity is three years after completion.
Earlier this year, Silverlink forward-funded a 35,000 sq ft office block and a multi-storey car park, also for phase one, with Aviva Investors. Aviva will take ownership of the building, with an end value of around £22m, which will be let to Newcastle City Council.
The financing is innovative as the council is taking a head lease to support the project and the building will be sublet.
The council is one of three other funding partners for both parts of the project, alongside Miller Construction and NE Local Enterprise Partnership.
John Dryden, regional director at RBS, said Silverlink was “driving the scheme forward in extremely demanding market conditions”.