Serviced living specialists Saxbury launch finance arm
By unlocking alternative funding solutions, Saxbury champions the construction of serviced apartments and aparthotels in the UK
An agile response to a cautious marketplace, Saxbury’s finance offering enables the construction and rental of serviced apartments and aparthotels to continue. “Operators are crying out to sign leases on buildings that need to be built for them,” explains Saxbury Leasing Director Ben Davis.
“Developers were pushing on an open door to the institutions who wanted to own these purpose-built assets,” he says of the pre-COVID appetite for funding C1-class schemes. However, high interest rates and market volatility have led to funds, banks and brokers becoming hesitant. “Now, developers are holding land and landlords can’t sell,” Ben adds. “Yet operators are still very keen to do deals.”
The consultancy’s Head of Finance, Kristian Hoy, agrees. “Pension funds have their hands on their wallets,” he muses. “But we’re here to bridge that gap and provide a different lending solution.” For many years, Saxbury has represented landlords or developers of aparthotels and serviced apartments. The company’s role is primarily as a development advisor which can also identify a best-fit operator through a search and selection campaign. “But we’ve been providing funding solutions in the background,” Kristian says.
“We’re in a vacuum of lending – so it’s the opportune time to launch this solution which has been in gestation for years,” Ben explains. “It’s borne of necessity,” Kristian adds. “The forward-funding model is broken. We’re in a flux position.”
Ben Davis, Leasing Director
Kristian Hoy, Head of Finance
Through a series of established relationships with funds and investors, Saxbury unlocks solutions available in neighbouring industries and deploys them to the serviced living sector. Where traditional brokers tend to lack the required expertise, Saxbury is uniquely positioned to interpret end users’ needs and gauge how the market will react to a given project, both of which underwrite the deal.
Saxbury has access to highly competitive packages, including refinancing options with competitive interest rates. Its services include funding for the purchase of a site, development finance, mezzanine finance and equity. From land and planning to development and exit, the firm employs a consultative approach.
“The demand is there right now – and we want to meet that demand not just for the people we’re speaking to already but for whoever in the industry is having these problems,” Kristian enthuses. “We’re working with several funds and investment companies that will be happy to take the perceived risk and help build these assets to completion.”
“The demand is there right now – and we want to meet that demand not just for the people we’re speaking to already but for whoever in the industry is having these problems”
- Kristian Hoy
Among other projects, Ben and Kristian are currently assisting on the development of an aparthotel in Birmingham. An end-to-end service, Saxbury advised on layouts, brought the project to market, identified the operator and provided funding. “We become part of a client’s inner sanctum,” Ben says.
Ben started his career working for serviced accommodation operators. “This is where I gained a unique appreciation of the sector while it was still in its infancy,” he recalls. After noticing that operators wanted to grow but didn’t necessarily have an in-house property team, he established himself as an intermediary agent to help them expand their property portfolios. Ben then co-founded Saxbury – a commercial real estate agency that focuses exclusively on this asset class. “I put all my experience in operating, property finding and putting deals together into this new venture,” he reveals. “We’re the only commercial real estate practice focusing on this asset class.”
With the best developers being increasingly pragmatic, Ben has observed that it is now common to invest in plots and projects without knowing exactly what the exit strategy is. Saxbury has become adept at assessing viability, securing funding and identifying an operator to monetise these assets which may have otherwise had an uncertain future.
“We become part of a client’s inner sanctum”
- Ben Davis
“I’ve been working in finance in central London for 25 years,” explains Kristian, who was previously a Structured Finance Officer funding residential projects. With a wealth of corporate experience, he set up an independent business in Notting Hill to provide non-high-street funding and has since diversified into larger-scale development finance and niche personal finance. He has worked with Saxbury for the last eight years. “We’re bringing my experience and expertise from a residential development background into this world to create a solution that ensures these buildings can be built and are income-producing,” he explains.
Saxbury can provide support throughout the lifecycle of a project, pre-empt potential problems and ensure viability at every stage. This includes the likelihood of the project being built for the given cost, of the operator providing the numbers they have promised, and of the market actually producing them. Crucially, Saxbury can assess all aspects of viability for a client before the deal is exposed to funders.
“It’s not just offering support,” Kristian says of the whole-life service. “It’s having the understanding and knowing whether a scheme can work.”
Empowered to de-risk clients’ investments, Saxbury pulls on decades of knowledge. “We have a better understanding of the value of assets than anyone else in the industry,” says Kristian. “We’re highly experienced but we’re also very approachable,” Ben adds. “Give us a call.”
Saxbury is eager to evaluate your lending requirements. Contact us to arrange a discovery call.
