“Assisted living is a growing sector with strong demand, and our experience in this space allowed us to structure a facility that worked for both the borrower and the project”
– Mark Witherington – Pallas Capital
Pallas Capital has completed a £2,021,500 development finance facility to fund the refinance of existing debt and the ground-up construction of a 16-unit assisted living scheme in Wallington, Surrey. The 16-month loan, structured at 65% loan-to-gross-development-value (LTGDV), marks the borrower’s first venture into assisted living after an established career delivering high-quality residential schemes.
The deal was led by Mark Witherington, senior originator at Pallas Capital (pictured), and introduced by broker Miles Wallace of The Commercial Branch, who has a longstanding working relationship with Witherington. On completion, the borrower plans to refinance onto a term loan as the scheme stabilises.
How the deal came together
The transaction required close coordination across a team of professional advisers. Robert Hutchins of AWH acted as valuer, Ruaidhri Mulligan of TSA Riley served as monitoring surveyor, and Danielle Fewtrell of Brechers handled the legal work.
Despite delays outside the control of all parties, the deal progressed through to completion, with Pallas Capital agreeing to increase the facility following a reassessment of costs.
Witherington’s prior experience in funding assisted living developments was central to structuring a loan that aligned with both the project’s construction timeline and the borrower’s intended exit strategy.
Why assisted living development is attracting investor attention
The UK’s assisted living sector is under significant and growing pressure. An ageing population, rising demand for care-integrated housing, and a chronic undersupply of purpose-built stock have combined to make the sector increasingly attractive to both specialist developers and mainstream residential builders looking to diversify.
Wallington, located in the London Borough of Sutton, sits within commuter distance of central London and benefits from established transport links and local amenities. Areas like this, with strong existing residential demand and access to healthcare services, are well-suited to assisted living schemes targeting older residents who want to remain in familiar communities.
For lenders and developers alike, the combination of demographic tailwinds and supply shortfall makes the sector a compelling focus for new development activity.
“This transaction demonstrates our willingness to support experienced developers moving into new asset classes where the fundamentals of the project are strong, and the sponsor has a proven delivery track record,” said Mark Witherington.
“Assisted living is a growing sector with strong demand, and our experience in this space allowed us to structure a facility that worked for both the borrower and the project. Despite some delays outside everyone’s control, the transaction progressed well overall, and we were pleased to support an increase in the facility following a reassessment of costs.”
“At Pallas Capital, we focus on building long-term relationships with both brokers and borrowers, and this deal is another example of how we work collaboratively to deliver funding solutions for development projects,” he added.
Key takeaways for landlords and investors
- Assisted living is a growing development niche, driven by demographics and persistent undersupply of specialist housing stock
- Experienced residential developers can access development finance for specialist sectors, provided the project fundamentals and their delivery track record are strong
- LTGDV-based lending allows borrowers to structure finance against the completed value of a scheme, not just what the site is worth today
- Refinancing onto a term loan at stabilisation is a common exit route for assisted living schemes, offering ongoing income rather than a one-off sale
- Broker relationships matter in specialist lending: an introducer with strong lender connections can significantly improve the speed and terms of a deal
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