Hampshire Trust Bank (HTB) has successfully arranged a £13.5 million funding facility aimed at facilitating the repositioning of the Kirkstall Brewery campus located in Leeds. This financing serves the dual purpose of refinancing existing debt while also partially repaying a previous lender, thereby stabilising the financial foundation of the project.
The facility, which spans an 18-month term, is secured against a former student village comprising 664 beds in total. Within this framework, there is a specific parcel of 442 beds that has received full planning consent to be converted into 151 residential Class C3 apartments. The project also retains 202 beds dedicated to Purpose-Built Student Accommodation (PBSA), creating a versatile scheme that caters to both the Private Rented Sector (PRS) and student housing needs.
Flexible Asset Management Strategy
This financial structure is designed to provide ample time for effective asset management and stabilisation, facilitating the repositioning of the scheme while maintaining flexibility regarding a range of exit strategies. Potential options include the disposal or refinancing of the PRS component, the sale or long-term leasing of the PBSA accommodation, or even a complete site disposal. Notably, no development activities are planned during the loan term, as the refurbishment of the PBSA component will be financed through the borrower’s equity.
Progress and Planning Approval
This transaction builds upon the significant progress previously made at the site, which includes the successful disposal of an eastern parcel to an institutional investor, as well as a long-term lease agreement established with Leeds City Council for part of the retained accommodation. This lease agreement is anticipated to generate substantial savings for the council, estimated at around £2.5 million per annum over the duration of the lease.
In November 2025, Leeds City Council granted full planning consent for the conversion of the PRS parcel, thereby paving the way for the next phase of the development. This progression aligns with the forward-thinking approach taken by HTB and the stakeholders involved.
Expert Insights on Asset Repositioning
Johnny Grassick, Associate Director at GLPG, played a pivotal role in introducing this deal, which was led by Alexia Evans, Lending Director at Hampshire Trust Bank, with support from Olivia Emmett. Evans remarked, “This was a scheme where the key consideration was how the asset would be managed over time, not just its position today. With planning in place and clear progress already made, the focus was on structuring a facility that allows that to continue without forcing an early decision, while remaining aligned to how the site will be worked through in practice.”
Grassick further highlighted that, “There wasn’t a single, defined exit here, but that reflects the strength of the site. With planning in place, a number of viable routes forward and progress already achieved on parts of the scheme, including the lease to Leeds City Council, the key was putting a structure in place that didn’t restrict those options too early.” This flexibility provides the borrower with the opportunity to leverage the existing momentum and decide on the best path forward as the project evolves.
Industry Trends in Asset Management
Neil Leitch, Managing Director of Development Finance at Hampshire Trust Bank, noted that transactions of this nature are becoming increasingly prevalent in the current market, where the focus has shifted towards repositioning existing assets rather than directly jumping into new development projects. He stated, “Where planning is already in place, the emphasis shifts to how the scheme is managed, how income is stabilised and how the exit is delivered over time. That requires a structure which gives the borrower the flexibility to work through those stages properly, rather than forcing a single outcome too early.” This approach not only optimises the asset’s potential but also aligns with the evolving dynamics of the UK PBSA market.