Avamore Capital completes £5m refinance to fund wall remediation on student scheme

The loan will enable the delivery of essential external wall repairs on a 157-bed student accommodation scheme with ground-floor retail.

When it was purchased in 2024, the property held a B2 external wall rating, requiring significant remediation to meet current fire safety standards.

Avamore’s loan refinanced the existing debt and provided full funding for the works, which total £1,613,575.

The scheme carries an expected GDV of £9.3m on completion, and the borrower has appointed an expert professional team and a specialist contractor to deliver the remediation.

Works could not begin immediately as the remediation plan had to be submitted to the Building Safety Regulator, creating a known lead-in period.

The borrower also aimed to use the Injecta-Clad system rather than undertake a full re-clad, which introduced additional uncertainty until approvals were confirmed.

Valuation considerations added further complexity due to high operating expenditure at the property, including a waking watch put in place as a result of the elevated fire risk.

Meanwhile, estimated build costs increased from £1m to £1.6m to cover the potential full re-clad option.

Despite these pressures, the borrower committed further shareholder equity to ensure the project remained viable, and Avamore worked closely with them to shape an interest service schedule aligned with the asset’s monthly cashflow.

The team facilitated a restructuring arrangement that allowed the existing lender to defer part of the outstanding debt, subject to an agreed DOP.

A permitted payment mechanism was introduced, enabling the borrower to proceed with the Injecta-Clad solution once confirmed and unlocking an estimated £600,000 cost saving compared to a full re-clad.

With the transaction already time-sensitive due to a previous lender withdrawing during the legal process, Avamore expedited underwriting and agreed to take a retype of the existing valuation to keep the deal on track.

Commenting on the transaction, Ed Blundell, head of underwriting at Avamore Capital (pictured above), 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.”