Arc & Co. delivers £16.4m development funding for premium care facility

Cameron Hayes, Director at specialist debt and equity advisory firm Arc & Co., has successfully secured a £16.4 million development loan for a 70-bed care home in Fareham.

The deal was structured on a three-year facility to support the full development cycle, with flexibility to extend the term subject to performance once the site becomes operational.

The deal marks a significant milestone, as it represents the first care home development funded by the chosen UK challenger bank, indicating the growing institutional appetite for the care sector as an asset class.

Having identified a lender that understood both the sector fundamentals and the developer's track record, Cameron was able to secure funding to meet the requirements on leverage and term.

The loan was delivered at an LTV of 85% on a turn-key basis, rising to 65% NIV—reflecting the lender's confidence in the project's viability and the sponsor's execution capabilities.

The deal benefits from a pre-let to an established operator for what will be a premium 5-star care offering.

Cameron commented:

"This transaction highlights the increasing institutional interest in the UK care sector, which has lagged behind other markets like Canada, New Zealand, and Australia in terms of investment appetite and the overall quality of care.

“The UK has an ageing population and requires care facilities that are fit for purpose, and which align with the long-term fundamentals of not growing obsolete from an investor perspective. It is great to be part of this process in a growing area of the market."