Octopus Real Estate has provided a £33m loan to Wavensmere Homes and Montane Partners to fund the £50m redevelopment of the North Place surface car park, located within Cheltenham’s Central Conservation Area. Arkle Court will comprise 147 houses and apartments, designed to sensitively enhance the street scene, including Grade II* listed St Margaret’s Terrace.
The regeneration scheme, which is the most central residential development in Cheltenham, received a resolution to grant planning in August 2024. Site enabling works started in February 2025 and groundworks will commence next month. Arkle Court will be delivered sequentially from the eastern boundary with North Place, running anti-clockwise to improve the site frontage.
The scheme has been designed by nationally acclaimed architects Glancy Nicholls to complement the town’s Regency architecture and create a sustainable new community in the heart of the town centre. Construction for the 75 three-bedroom townhouses and 72 one- and two-bedroom apartments is anticipated to take two and a half years to complete, with the first phase of the project scheduled for home handovers in Q3 2026.
This financing, arranged by leading debt advisory boutique BBS Capital, marks the third time Octopus Real Estate – part of Octopus Investments and a specialist real estate investor and lender – and Wavensmere Homes have teamed up over recent years to deliver brownfield regeneration. Octopus is currently providing peak debt finance to facilitate the historically significant redevelopment of Friar Gate Goods Yard in Derby city centre. The regeneration of the former Derbyshire Royal Infirmary – off London Road – into the £175m Nightingale Quarter has also utilised development funding from Octopus.
Sam Wisker, Investment Manager – Commercial & Development Debt, Octopus Real Estate, commented: “At Octopus Real Estate, we always want to work with best-in-class developers who are aligned with our vision and values. Wavensmere has a strong reputation for delivering high-quality, sustainable homes. We are thrilled to be once again working with this dynamic team, and look forward to seeing the positive impact the Arkle Court regeneration project will have on the local area.”
Extending to over 3.5-acres, Arkle Court will include multiple areas of high quality landscaped open space, with the opportunity for a public art installation to be created as part of the Cheltenham Paint Festival. Vehicular, pedestrian and cycle access is from North Place, less than half a mile from the town centre’s historic core.
James Dickens, Managing Director of Wavensmere Homes, said: “There has been a desire to redevelop this key site for Cheltenham for over a decade. Receiving development finance from Octopus enables us to continue the renaissance of the wider St Paul’s area by injecting millions into delivering 147 much-needed energy efficient homes.
“While we are already on site, this funding facility enables us to confirm delivery timescales. The quality of our Arkle Court development will showcase what can be achieved when the Borough Council and developers work together to unlock complex regeneration schemes for the benefit of Cheltenham. Our team will continue to work with the Council and other stakeholders as the construction programme progresses.”
Formerly the site of Black & White’s Coach Station, in 2013, the Council awarded planning for a large supermarket and 143 new homes, which never materialised. The new designs for Arkle Court are gas-free with a target A-rated energy performance for the townhouses and B for the apartments. Wavensmere Homes’ specification of local materials will help to reduce carbon footprint, along with an array of energy saving and generating technology, including air source heat pumps, solar PV panels and centralised mechanical ventilation heat recovery systems. Each house will also benefit from dedicated parking which will be served by 7kW EV car chargers.
Nick Spencer, Co-Founder at Montane Partners said: “It took years of partnership working to unlock this site and break ground. We are thrilled that this landmark brownfield site will bring about the delivery of highly sustainable family houses and apartments, with over 100 construction jobs created in the process.
“While the viability assessment for the project did not allow for 20% affordable housing, we will proudly be delivering this allocation on-site, along with a contribution of over £1m for upgrades towards local education, libraries and the Cotswold Beechwoods Special Area of Conservation. In addition, a high proportion of the new homes will be aimed at first time buyers and young families, with attainable prices set significantly below prime Cheltenham values.”
The social, environmental and sustainability components of the scheme will complement Cheltenham Borough Council’s key targets, outlined in the local authority’s 2027 Corporate Plan. The environmental impact of the project will deliver sustainable drainage and biodiversity net gains well in excess of the policy regulations.
The redevelopment of the North Place car park will also connect Pittville Park on the one side, through North Place, to the thriving Brewery Quarter, the Lower High Street Poundland site – which will see a mixed-use redevelopment – through to the cyber-tech Hub MX and Minster Gardens. Enhanced connectivity and walkability will cut down travel times, increase opportunities and health and wellbeing, reduce isolation, and drive economic growth.
Wavensmere Homes is constructing seven major urban regeneration schemes, with the other six located in central Birmingham, Derbyshire, Ipswich, and Wolverhampton. Five further developments are in the immediate pipeline. The Birmingham-headquartered housebuilder has around 3,500 new homes either under construction or in planning.
Montane Partners is actively investing in property throughout the UK, across the residential, retail, leisure and hotel sectors.
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