New growth for co-living? Developer secures £6.4 million funding deal

24 June 2020 | Investment

The Studios24 – which delivered the first major co-living development in the Midlands – has secured funding of £6.4 million from Cynergy Bank, a specialist bank established in 2018 by entrepreneurs to serve the needs of business owners, property entrepreneurs and family businesses.

The bank agreed the refinance package for the London-based property company’s £12.5 million residential development in Wolverhampton.

The Studios24 says it has transformed a dilapidated 12-storey office building ‘into one of the UK’s leading co-living developments’. The project, at Birch Street – not far from the University of Wolverhampton and Molineux Stadium – recently reached practical completion and can accommodate more than 200 residents.

Barry Glantz, managing director of The Studios24, said: “To have secured a £6.4 million loan from Cynergy Bank, while the UK is experiencing very difficult economic circumstances, is a major vote of confidence in our co-living concept.”

He said the firm had been discussing the deal with Cynergy Bank over the course of the last six months and have been able to strike ‘a very good long-term deal’.

He added: “One of the many things that impressed them was the demographic at The Studios24. Of all our current residents, only 10 are students and they are post-graduates. The rest are working in sectors such as healthcare, construction, education, human resources, and technology.”

Glantz continued: “James Herron and Simon Gunnell, of Cynergy, really believe in the project. They came to the development to see what we have created, and liked what they saw. We believe this could be the first of many projects they may support, and they are keen to provide funding for our next venture. I am now actively looking for potential development sites across the West Midlands.”

Since being established, Cynergy Bank has expanded its reach with offices in London, Birmingham, Bristol, Manchester, Redhill and Edinburgh.

Simon Gunnell, relationship director at Cynergy Bank, said: “Cynergy Bank is delighted to support Barry and all at The Studios24 on this project. The concept is providing a viable solution for residents and it has created a superb co-living environment which has attracted residents from a wide and varied demographic. We pride ourselves on working with our clients to understand their business needs and aspirations.” 

He said the Cynergy Bank model uses local, skilled relationship managers ‘that understand the markets where we operate, who can quickly learn our clients’ needs and deliver certainty as well as speed’. 

The Studios24, arranged as apartments, provides residents with en-suite studios, shared facilities including kitchens, working and relaxation areas, a café and bar, gym, laundry and high-speed internet. Rent includes energy bills, cleaning, council tax, superfast broadband, access to a gym, fitness studio, café and bar, and a range of social events for residents and guests.

Co-living is defined as a form of housing that combines private living space with shared communal facilities, designed to encourage communal interaction and build a sense of community. How well that ethos tallies with a world of social distancing, reduced interaction and reduced communal spaces isn’t clear-cut.

While social events can occur virtually or at a distance, and communal interaction can happen in the same way, it’s not quite the same thing – and this could affect one of the main selling points and key markers of the co-living and Build to Rent movements. 

The Studios24 is a co-living development in the heart of Wolverhampton, helping to regenerate the Westside area of the city. You can find out more about the development here.

This post has originally been featured in Property Investor Today.