The 317-bed student accommodation scheme on Liverpool’s Devon Street, which was owned by a special purpose vehicle of the same name, has fallen into administration and consultancy Colliers International has been hired to value the property for sale.
The One Islington Plaza SPV owes a creditor, Lender Route Finance, £4.3m, according to a report from the joint administrators Simon Campbell and Paul Zalkin from Quantuma Advisory. But a sale of the site is only estimated to realise between £1.2m and £2.2m and therefore is unlikely to repay the debt in full, the report said.
Incorporated in 2015 by Chris Saggers and Alan Lovett, the One Islington Plaza company appointed contractor Ridgemere to build the £20m student scheme in the Knowledge Quarter.
Work was scheduled to complete in time for the 2018/19 academic year but was delayed by 12 months before the scheme finally completed in October 2019.
Apartments were sold to individual investors and then leased back by the developer to oversee rentals, with the promise to investors of an 8% net return over three years, according to the administrators’ report.
However, the developer was unable to deliver on its promise due in part to the impact of the Covid-19 pandemic on the number of students seeking to rent apartments in the city, the report added.
A £1.44m bid from London-based asset manager Grangemere to buy the nine-storey building was provisionally accepted by the company’s directors prior to the appointment of Quantuma. It is understood the bid is still being considered as part of the administration proceedings.
Quantuma hopes to “hand over management of the building to a committee of investors at the earliest opportunity”, the report said.
At the time the administrators were appointed, 157 of the 317 apartments were occupied, according to building’s current manager, Homes for Students.