The funding, which has a term of 24 months, has assisted in the acquisition of the former Queens Arms pub on Portland Road — which last closed its doors over 10 years ago and has fallen into a state of serious disrepair — and the development of 30 apartments.
Work has already commenced, which consists of a mix of studio to three-bed apartments and includes nine affordable units.
The scheme will also include commercial space on the ground floor for retail or hospitality use.
The project is due to complete in Autumn next year.
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Miheer Mehta, founder and owner of Sterling Rose Homes, said: “This development will replace an unsightly, derelict pub with stylish new apartments and commercial space, injecting more life into Portland Road and helping with the broader regeneration of the area.
“We approached Paragon and have been very impressed with the team’s efficient processes and proactivity.
“It was on the same page as us from the start and was able to thoroughly cater to our needs as developers.”
Robert Orr, managing director at Paragon Development Finance, added: “We are delighted to have backed Sterling Rose Homes on this new scheme, which will create much needed new homes and breathe life back into Portland Road.
“We have been thoroughly impressed by previous Sterling Rose Homes projects, which demonstrates the company’s commitment to excellence.
“We are sure these apartments will prove popular with buyers.”