What a £67.2m Cardiff BTR facility signals for living-sector finance

A significant transaction for Cardiff BTR

Close Brothers Property Finance has completed a £67.2m facility for Draycott Group’s Harlech Court development in Cardiff, according to Bridging Loan Directory. The 340-unit Build to Rent scheme has a reported gross development value of more than £100m and will occupy a former purpose-built office site in the city centre.

The scale of the transaction is notable. Harlech Court will be a 30-storey building and is set to become one of the tallest buildings in Wales. It is also Draycott Group’s largest scheme to date, although the Cardiff-based developer has a 40-year record across residential and commercial development, including BTR and Purpose Built Student Accommodation.

For developers and investors, the deal provides evidence that substantial capital remains available for credible living-sector projects outside the UK’s largest established markets. It does not mean that finance for comparable schemes will be straightforward. Rather, it demonstrates how lender appetite can align with a strong location, an experienced sponsor and a clearly defined residential proposition.

Specialist teams are targeting greater complexity

The facility was led by Close Brothers’ Structured Finance team, established in 2025 alongside its core SME housebuilder business. Bridging Loan Directory reports that the team focuses on large and complex BTR, co-living and PBSA transactions across the UK.

This distinction matters. A 340-unit high-rise BTR development presents a different financing proposition from a smaller build-to-sell scheme. The lender must assess not only delivery and cost risk, but also the proposed rental product, operational model and route into the completed asset. The creation of a dedicated team indicates that lenders may increasingly separate larger living-sector transactions from conventional housebuilding finance.

That specialisation should encourage sponsors to approach funding as a structuring exercise rather than a simple search for headline leverage. The £67.2m facility and reported GDV do not disclose the project’s total development cost, drawdown profile or wider capital structure. Those details are central to understanding how debt supports construction and how the scheme is intended to progress through completion and stabilisation.

What lenders are likely to examine closely

Harlech Court combines scale, vertical construction and the redevelopment of a former office site. Its proposed one and two-bedroom apartments will be supported by a co-working area, meeting room, gym, residents’ lounge and sky lounge. This places the residential offer and amenity strategy at the centre of the project’s positioning.

For sponsors considering comparable developments, the transaction highlights several areas that need to form a coherent funding case:

• Evidence that the developer and project team can deliver the proposed scale and building type.

• A clear explanation of how the site, apartment mix and amenities support the intended rental proposition.

• A robust capital structure that reflects construction requirements and the scheme’s route beyond practical completion.

• Early engagement with lenders capable of assessing complex living-sector projects in the relevant region.

Draycott’s long-standing activity in Cardiff appears particularly relevant. Local experience can strengthen the narrative around site selection and delivery, while the lender’s regional focus may help support informed underwriting. Close Brothers appointed a Business Development Director in February 2026 to drive growth across Wales, the South West and the Midlands.

Pipeline growth creates opportunity and competition

Bridging Loan Directory reports that the Welsh BTR market grew by 16% over the year, from 3,296 units completed, under construction or in planning in Q1 2025 to 3,824 in Q1 2026. Units in planning increased by two-thirds during the same period.

That pipeline growth is constructive for the development finance market because it creates a broader pool of potential transactions. It also means sponsors must consider the timing and positioning of their schemes carefully. A larger planned pipeline can increase the importance of differentiation, delivery certainty and a credible operational proposition.

For investors, the transaction shows institutional-scale rental development advancing in Cardiff. For lenders, it demonstrates the potential to deploy substantial capital through specialist teams. For developers, the main conclusion is more disciplined: finance is most likely to follow projects where sponsor capability, location, product and capital structure support one another.

Our view

Harlech Court is a useful marker for the continued development of BTR finance in regional cities. The transaction suggests that lender appetite is broadening, but it also reinforces the selective nature of large development funding. Sponsors should establish the funding strategy early, present the complete capital requirement clearly and identify lenders whose mandate matches the project’s scale, sector and geography.