Octopus Real Estate completes £24m loan for Wavensmere development

September 25, 2024

Octopus Real Estate has provided a £24m loan to Wavensmere Homes to bring about the £75m redevelopment of the historic Friar Gate Goods Yard in Derby city centre. The nationally significant mixed-use project will reanimate two landmark Grade II listed buildings into over 110,000 sq ft of commercial space, alongside 276 new build homes.

The funding agreement marks the second time Octopus Real Estate (part of Octopus Investments) and Wavensmere Homes have teamed up to deliver brownfield regeneration in Derby. The lender provided a £22m loan to facilitate the redevelopment of the former Derbyshire Royal Infirmary – off London Road – into the £175m Nightingale Quarter, which is now in the final phase of construction.

Nick White, Head of Development Origination at Octopus Real Estate, said: “At Octopus Real Estate, we always want to work with stellar developers who are aligned with our vision and values. Wavensmere has a strong reputation for delivering high-quality, sustainable homes to local communities by meticulously restoring heritage assets. We are thrilled to be working with this dynamic team again, and look forward to watching the positive impact the re-birth of Friar Gate Goods Yard will have on the city of Derby.”

Within a matter of weeks, work will commence on site to restore the 19^th Century Bonded Warehouse and Engine House. The two fine terracotta buildings will deliver a total of 111,275 sq ft of flexible offices, health and fitness space, a restaurant/café, together with a regional sales centre for Wavensmere Homes.

Extensive new areas of open space – including play areas and pocket parks – will also be created, in addition to the retention of a TPO tree buffer, to enhance the biodiversity of the site. The elevated area adjacent to Friar Gate Bridge will become a new multi-purpose public realm and community space, with retention of some of the original railway arch facades. New vehicular, pedestrian and cycle access will be created at various points around the 11.5-acre (4.96Ha) site, from Uttoxeter New Road, Great Northern Way, and Friar Gate, with the Mick Mack cycling route also to be extended.

Matt Brighton, Commercial Director of Wavensmere Homes, said: “We are proud of how Nightingale Quarter has been received by the residents who live there, the wider local community, politicians, and regional and national commentators. Located a mile away across the city centre, Friar Gate Goods Yard is another unique and emotive restoration project that we are fortunate to have the expertise and resources to undertake.

“Securing a £24m loan facility to draw down from during construction will enable us to commence work without delay and deliver an uninterrupted development programme. Derby has become a hotbed of regeneration activity, with compelling socio-economic metrics that support our level of commitment and investment. Octopus Real Estate is a proven and trusted partner of Wavensmere, and we’re pleased to be working together on such a significant mixed-use scheme”.

Wavensmere Homes has worked with Glancy Nicholls Architects and Pegasus Group to produce the detailed plans to transform the primely located historic asset, which has lain derelict since 1972. With funding from Octopus in place, the site will be brought back into public use, transforming Derby’s landscape and delivering much-needed attainable city centre housing.

The designs for the 227 two- and three-bedroom townhouses that will surround the two listed buildings are bespoke. Curved and terraced street scenes will honour the beauty and vista of the Bonded Warehouse, while incorporating a range of energy saving technologies and strategies. A four-storey apartment building containing 49 apartments will also reinstate the lost streetscape of the Stafford Street frontage. The highest EPC rating of A is being targeted for the new homes, with all plots designed to be future-proofed ahead of the 2025 Future Homes Standard.

The site sits just outside the Friar Gate Conservation Area, which features notable Georgian townhouses with high-quality brickwork and fine architectural detailing. The Friar Gate Goods Yard was intended as the main goods depot for the Great Northern Railway line, to handle coal, livestock, timber, and metals. Designed in 1870, and entering operation in 1878, the Bonded Warehouse building contained extensive warehouse space and offices. It was used as a store for the American Army in WWII to house ammunition and other supplies.

The Engine House was also built for the Railway by Kirk & Randall of Sleaford. It is Italianate in style and built from Welsh slate. The Engine House supplied power to the hydraulic lifts and capstans at the Bonded Warehouse. The site first became derelict in 1967, and overtime became overgrown and fell into a poor state of repair. An arson attack took place at the Goods Yard in 2020, which exposed the whole inner iron structure of the two historic buildings.

Derby’s array of city centre amenities and attractions are within a five-to-10-minute walk of the site, with Derby Train Station being 1.5 miles away. Several bus routes are located along the boundary roads to the site on Friar Gate and Uttoxeter New Road.

The Goods Yard redevelopment will promote sustainable development through the use of low carbon materials, modern methods of construction, and renewable energy generation.

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