London, UK – Arc & Co.has successfully structured a debt and equity facility for a landmark 135-bed purpose-built student accommodation (PBSA) development in Bristol. The complex transaction brings together Downing LLP as senior debt provider and Hame Capital as equity partner in a strategic joint venture with the sponsor Colico Living.
The finalised financing package includes a circa £26 million senior development facility from Downing alongside a preferred equity investment from Hame Capital. Structured at approximately 68% LTGDV and 77% LTC, the facility is designed to support the full delivery of the scheme through to completion and stabilisation.
The project required more than a year of dedicated advisory work, led by Senior Broker Corey Dennis. To bring this scheme to fruition, the team navigated a particularly selective capital markets environment and overcame a series of significant hurdles. This intensive process included managing intricate valuation challenges and facilitating a total redraft of the planning application to address amenity space requirements before successfully securing approval.
The team navigated a selective market to engineer a 100% funding solution via a £26m senior facility and preferred equity. Demonstrating a holistic commitment to client comfort that went well beyond the standard remit, the team aligned these terms with the 43-month build plan. In doing so, Arc & Co. solved a major developer pain point and provided the sponsor with essential long-term security.
Comments
Corey Dennis, senior broker at Arc & Co., said: “This was a complex, multifaceted transaction given the scale of the project and the extensive planning process.
“We carefully structured the funding package to ensure the scheme was fully capitalised while supporting the sponsor’s overall strategy. It was about finding that specific alignment between Downing and Hame Capital that truly recognised the project’s long-term value.”
“We are seeing a market shift where developers are moving towards asset stabilisation over disposals, due to the slower sales market, which naturally impacts liquidity. In this environment, success depends on having a partner who understands the nuances of the entire capital stack and which senior and equity partners to approach. That depth of specialist knowledge played an important role in delivering the transaction.”
Will Powell, investment director at Downing LLP, said: “We were delighted to close this significant funding package for an experienced and capable sponsor delivering a well-designed student scheme in central Bristol.
“The financing came with a number of complexities concurrent with this type of deal, and we are looking forward to seeing the project progress over the coming months. A big thanks to all involved.”
Future timeline
The development is positioned to serve Bristol’s two leading universities and is now in a position to progress through Gateway 2, with construction slated to begin in early 2027. Key contributions to the transaction included Scott Harvey at Hame Capital and Will Powell at Downing LLP.
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