The 27-month facility, structured at 70% LTGDV, will be used to fund the conversion of the vacant educational building in the city centre through to completion of the build.

The borrower intends to refinance onto a term facility once the scheme is fully let and generating income.

Senior originator Mark Witherington and underwriter Ryan Houssart led the transaction for Pallas Capital, working directly with the borrower, an experienced developer with a background in co-living schemes.

“Change of use schemes ask you to think beyond the build itself,” said Ryan.

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"You need a clear picture of how the finished asset will actually work once it's operational, and having that grounding in PBSA gave us real confidence in structuring this facility around the borrower's exit from the outset.

“It also helped that we were working with such a proactive, engaged developer throughout, which made the whole process a genuinely collaborative one.”

Mark added: "I've covered the Midlands for 38 years, and Leicester is my home city, so I know it, and the towns around it, in real detail rather than from a spreadsheet.

“Nottingham, Leicester and Derby sit close together on a map, but they're genuinely different places economically, and understanding what makes each one tick day to day is a big part of how we're able to lend with confidence wherever in the UK a deal comes from."