163-unit Edinburgh residential scheme underway with £20mn Octopus Property development loan

  • Record 2018 development deal for Octopus Property as UK-wide housing shortage underpins demand for new schemes
  • Facility will support the conversion of Chesser House office building to residential
  • Targeting £300mn of residential development finance across the UK during next nine months

London, 12 September 2018 – Specialist property lender Octopus Property, part of the Octopus Group, has agreed to provide MCR Property Group, the established real estate investment and development company, with a £20 million development loan, to convert a former office building in a prime Edinburgh location into 163 apartments.  It continues Octopus Property’s regional expansion and follows the July provision of a £10 million Edinburgh Marina acquisition loan.

Planning consent has been secured to convert Chesser House into a mixed-use development that will be known as Elfin Square and comprises of 123 one, two and three bed private apartments for sale, alongside 40 affordable units and a commercial premise.

The Edinburgh housing market continues to perform favorably, with 10% annual house price inflation significantly above the UK average and strong liquidity underpinned by a shortage of stock. Demonstrating the demand for well-located property in the city, 63 of the units have already been reserved and the sale of the affordable units has been agreed with a local housing authority.

Located on Gorgie Road in the sought after Chesser suburb, 1.5 miles from the City Centre, the site benefits from its close proximity to both; the Bal Gram tram station, which connects to Princes Street and Edinburgh airport; and the Edinburgh ring road.

Gavin Eustace, Head of Residential Development at Octopus Property, commented: “This is an exciting project to be involved with, in what is one of Europe’s most dynamic and strong performing cities. We are particularly comfortable working alongside a developer with a track record of delivering high quality schemes across the UK and hope this is the start of a long and mutually beneficial relationship.”

The private apartments have been renamed ‘Embankment West’ and will be sold by MCR Property Group’s residential sales arm, Regency Residential.

Chris Taylor, Managing Director of Regency Residential, said: “Edinburgh’s population exceeds half a million and is growing, but there continues to be a major issue with undersupply of quality homes. Considering the city’s documented potential, developing residential space is absolutely key.”

Regency Residential and MCR Property Group recently received planning approval for a scheme called New Monaco in Birmingham, totaling 1,009 units. This is in addition to a 9,000-unit pipeline which they expect to grow to over 15,000 annually over the next five years.

 Land Registry, March 2018