Aldermore bank has provided a £29m, 10 year, interest only Commercial Residential Investment refinance facility to Kexgill Cranbrook Limited and Kexgill Cottingham 2 Limited, both subsidiaries of Kexgill Limited. The European Kexgill Group own the innovative University Quarter, a branded area adjacent to The University of Hull campus. The deal represents the largest commercial mortgage transaction Aldermore has done to date.
It involved the refinancing of 174 residential units, consisting of houses in multiple occupation (HMOs) and a large student accommodation building. In total the residential units make up 857 bedrooms which form a substantial part of the University Quarter. It is located adjoining The University of Hull.
John Carter, commercial director for commercial real estate at Aldermore said: “We’re delighted to have worked with such an experienced operator like Kexgill and provide them with the bespoke finance facilities they need. Student accommodation projects can be complex and developments in the sector are often not well understood by some lenders. This deal underpins Aldermore’s expertise in this market, our commitment to provide regional support, and our mission to back clients like Kexgill to fulfil their ambitions.”
Kexgill has a consistent track record of letting, even whilst the units are being renovated. Over the last four years, and during Covid-19, the occupancy rates have been around 95%. In recognition of the importance of high speed and reliable internet access for students, Kexgill recently completed a programme of upgrading their entire portfolio to fibre optic broadband. Additionally, across all the properties, maintenance teams are available on call 24/7 and are ready to conduct repairs within the same working day.
Michael Graham, senior lending manager at Aldermore, said: “This deal is a great example of the work we’re doing in the north of England. Working closely with brokers to back operators and help them get the funding they need.”
Richard Stott, managing director of the Kexgill Group, said: “We needed a trusted partner to understand our commitment to making cohesive long-term communities not just bricks and mortar. The University Quarter is a thriving area which includes services and facilities which add to the security but not normally associated with an investment vehicle. We have found that partner in Aldermore.
“Notwithstanding the complexity of the deal due to quantum of buildings, it was a very smooth transaction involving corporate solicitors Andrew Jackson Solicitors LLP at their York office and Clarion at their Leeds office, in addition the expertise of Steve Williams of Bespoke Business Finance.”
The bank’s Commercial Residential Investment Mortgage was launched in February 2020 for clients looking to purchase or remortgage larger residential portfolios including multi-unit blocks.
Steve Williams of Bespoke Business Finance recommended Aldermore for the financing. Ben Lamb and Phil Dine of law firm Clarion acted for Aldermore. Andrew Jackson Solicitors LLP acted for Kexgill Limited led by Property Partner Helen Mellors with Mark Davies (banking) and Samuel Peake (Property).
