Funding development and conversion sites
A student development or conversion site is land or a building being taken from its current state to a finished PBSA scheme. That spans a cleared or consented plot for ground-up construction, an office or other commercial building converted to student use, and schemes brought forward under permitted development or a change of use. It is the highest-return and highest-risk end of the market.
Site and conversion finance, as we use the term, is the bridging, development or conversion facility used to buy the site, fund the build or conversion, and carry the scheme to practical completion, with the exit onto stabilisation or investment finance once it lets. Because the asset is not yet producing income, lenders underwrite the scheme, the cost, the GDV and the credibility of the exit rather than a trading record.
Conversions, particularly office-to-PBSA, can be quicker and cheaper than ground-up construction where the structure suits, but they carry their own risks: planning or change-of-use consent, the suitability of the floorplate for student rooms, and the works needed to meet modern standards. Lenders price these carefully against the GDV the finished scheme will support.
We structure the site, build and exit so the route from acquisition to a let, stabilised asset is clear, and we run the market across bridging, development and forward-funding lenders, layering mezzanine or equity where the stack needs it.
What we fund
- Ground-up PBSA development on a consented site
- Office-to-PBSA conversions under change of use
- Permitted-development conversions to student use
- Forward-funded schemes pre-committed to an investor
- Site acquisition ahead of planning or build
- Mixed-use schemes with a student element
Financing site acquisition and the build
We arrange site and conversion finance in stages and pre-agree the exit. To secure a site we place bridging to around 60 to 70%, including where planning is being progressed. For the build or conversion we arrange development finance to around 60 to 70% of loan to cost, or roughly 60 to 65% of GDV, drawn in stages against a monitoring surveyor who certifies each drawdown. Where an investor commits ahead of completion we arrange forward funding so construction is funded in stages and the asset transfers on practical completion. We pre-agree the exit onto stabilisation or investment finance once the scheme lets, and where senior debt stops short of the capital need we layer in mezzanine or equity. We frame every figure as indicative and never as an offer.
Permitted development, planning and what lenders assess
Lenders assess a development or conversion scheme on cost, GDV, planning and deliverability, then test the developer and the eventual operator. A consented ground-up scheme with a fixed-price build and a credible contractor is the most straightforward; a conversion adds change-of-use or permitted-development risk and questions over whether the floorplate suits student rooms. Lenders treat unresolved planning as a material risk and want a deliverable build programme and a credible exit. Puma Property Finance, Shawbrook, Secure Trust Bank and Together are active across student development and conversion lending, with Alternative Bridging on the site leg. Naming a lender describes the market; it does not mean we have a relationship with it. As an arranger with no exclusive tie, we test the scheme's risk profile against the development lenders whose appetite fits it.
Loan to cost, GDV and the exit
A development scheme's finance is built around two numbers, the loan to cost that funds the build and the GDV that sets the value on completion, with the exit being the moment the development debt is repaid. The exit rests on the same picture that values standing assets, with prime direct-let yields of around 4.75% in London and 5.50 to 5.75% regionally (Knight Frank, Q2 2026). Supply is constrained: around 19,000 beds are under construction for 2026/27 against a ten-year average of about 21,000 a year (Knight Frank, Q2 2026). For lenders, a deliverable scheme in an undersupplied catchment has a clear, well-evidenced exit by refinance or sale.
Finance that suits development and conversion sites
- PBSA development financeFunds the build or conversion, drawn against cost and GDV.
- PBSA bridging financeSecures the site or funds planning gain ahead of the build.
- Forward funding and forward commitmentFunds construction in stages for a pre-committed investor.
- Mezzanine and equityTops up the capital stack where senior debt stops short.
What drives a development or conversion site's numbers
A development or conversion scheme is underwritten on cost and GDV, so the economics are about the journey from a site to a let asset rather than a trading record. The decisive factors are the build or conversion cost, the GDV the finished scheme will support, the planning position, the deliverability of the programme and the credibility of the exit. A conversion, particularly office-to-PBSA, can be quicker than ground-up where the floorplate suits, but it carries change-of-use and planning risk. The exit rests on real demand and constrained supply: around 19,000 beds are under construction for 2026/27, against a ten-year average of about 21,000 a year (Knight Frank, Q2 2026), with delivery concentrated in Russell Group cities. We model cost, GDV and the stabilised income that supports the exit.
Indicative development and conversion leverage and rates
Indicatively we arrange site bridging to around 60 to 70% to secure a site, then development or conversion finance to around 60 to 70% of loan to cost, or roughly 60 to 65% of GDV, drawn in stages against a monitoring surveyor who certifies each drawdown. Forward funding lets an investor fund the build in stages and take the asset on completion. We pre-agree the exit onto stabilisation or investment finance once the scheme lets, and layer in mezzanine or equity where senior debt stops short. The exit value is set by net initial yields on the stabilised income, with prime direct-let stock at around 4.75% in London and 5.50 to 5.75% regionally (Knight Frank, Q2 2026). These are market-typical, indicative figures and never an offer; the terms depend on cost, GDV, planning and deliverability.
