THE scheme to redevelop York's former Gas Works site has taken a major step forward with a £73.8 million finance deal.

York-based Ice Cubed Property Finance has completed a £73.8m 'development facility' with Oaktree-backed lender, Silbury Finance, for Heworth Green Developments Ltd, who are developing the 215-flat project for part of the site in Heworth Green.

Silbury said the fundamentals underpinning the UK housing market remained 'highly compelling,' despite the wider market volatility and threat of a recession. 

A spokesperson said the deal will fund remediation of the site and the subsequent construction of the 215 flats, and include a "generous package to incentivise and reward sustainable development".

They said: "A discount on the exit fee has been agreed if Heworth Green Developments Ltd meets certain sustainability criteria, including a minimum high B EPC rating."

They added that the funding was for site-wide infrastructure and for the development of 215 private sale apartments in two zones, while a third zone had been sold to Moda Living, which would fund and develop private rented sector units themselves.

Paul Ellis, director of Heworth Green Developments Ltd, said the site was a complex one that had been vacant for over 20 years, which had required the company to work with highly experienced partners, including Ice Cubed Property Finance and Silbury Finance. 

"The team’s deep knowledge of the UK regional residential market and ability to structure bespoke facilities means the delivery of what will be a highly sustainable and much needed residential scheme is a step closer," he said.

Tom Frank, managing director of Ice Cubed Property Finance, who advised on the deal, said he was delighted to have supported a 'landmark development' in central York. 

"We have supported the vision for the Gas Works, a landmark city centre redevelopment, since Heworth Green Developments acquired the site, and it is fantastic to see the final piece of the jigsaw come into place and to ensure this scheme can become a reality," he said.

"While the journey has had its challenges, we have achieved our objective working closely with the client, and Gavin and his team at Silbury. 

"We are especially proud of the sustainability element of the loan, and it is something that has become a main pillar in our financial architecture ethos.”

Gavin Eustace, founding partner at Silbury Finance, said that despite the wider market volatility and threat of a recession, the fundamentals underpinning the UK housing market remained 'highly compelling.'

He said: "In particular, we anticipate continued demand for regional schemes around high growth urban centres."

The development, expected to complete in 2024, will comprise a mix of one, two and three bed apartments, across three towers.

Features will include an onsite gymnasium offering studio classes, flexible workspace and outside space, including an edible garden where residents can grow their own fruit and vegetables.