Mezzanine funding supports 51-unit residential development in Newcastle

The development

This scheme sits within the Ouseburn Valley, a well-known creative and cultural area just one mile from Newcastle city centre. Once a timber yard, the site has been part of a wider regeneration story over the past 40 years. 

McIver Homes developed a seven-storey building delivering 51 apartments across 36,792 sq ft. The design reflects the character of the area, combining red brick with modern metal cladding and overlooking the north bank of the River Ouseburn. The location, along with strong rental demand, made it a well-positioned scheme from the outset.

The funding requirement

The developer had secured senior funding from Aldermore Bank but required additional capital to support build costs and complete the overall funding structure. As is often the case, the senior lender had reached its lending limit within its credit parameters. This left a gap that needed to be filled for the project to move forward without increasing the developer’s equity contribution.

The funding solution

Property Box Finance provided a £400,000 mezzanine facility, sitting behind the senior lender in the capital stack.  The funding was structured to support the build phase, allowing the developer to progress the scheme without restructuring the senior facility or introducing additional complexity. By working alongside the senior lender, the facility helped complete a balanced and workable funding package.

The outcome

The development was completed successfully and the apartments were fully let following completion, and the scheme refinanced. The scheme now forms part of the wider regeneration of the Ouseburn Valley and reflects strong demand for well-located rental accommodation in Newcastle.

Scott Arnot, business development director at Property Box Finance, said: “This was a well thought through scheme in a strong location. The senior funding was in place and our role was to help complete the picture so the development could move forward. It’s a good example of how mezzanine can support delivery without overcomplicating the structure.”