Student accommodation developer Danehurst has completed an £18 million refinancing of The Pepper Mill, a 155-studio purpose-built student accommodation (PBSA) development in Bonnington, Edinburgh.
Secure Trust Bank Real Estate Finance provided the facility at 63% loan-to-value, with an initial term of 15 months. The development reached practical completion in time for the 2025/26 academic year.
The scheme comprises studios across multiple floors, with communal facilities including a lounge, gym, library, cinema room and games room. Danehurst’s PBSA portfolio also includes schemes in Southampton and previously Egham, Surrey.
Supply shortage in Edinburgh
The refinancing occurs as Edinburgh faces significant pressure in its student accommodation market. Research from Student Crowd in March 2026 identified 23,109 PBSA beds against estimated demand of 41,325, creating a shortfall exceeding 18,000 places.
Planning constraints are expected to limit future supply. Edinburgh’s City Plan 2030, which took effect in November 2024, introduced restrictions capping studio apartments at 10% of unit mix in PBSA developments. Construction on The Pepper Mill commenced before these regulations applied.
The policy shift follows broader regulatory changes affecting Scotland’s property market, as local authorities implement stricter development guidelines.
“Returning to STB to refinance this particular asset was an easy decision,” said Bob Bratland, director at Danehurst. “The bank has a strong reputation in the PBSA space, and we were confident in the team’s ability to see this deal through to completion.”
Lender perspective
The transaction represents the second deal between Danehurst and Secure Trust Bank since 2021, led by Richard Lynn, senior relationship director, and James Reeves, relationship manager.
“Edinburgh is one of several cities across the UK where demand for student accommodation significantly outweighs supply,” said Lynn. “The Pepper Mill is a standout development, and we’re pleased to be supporting Danehurst again in providing much-needed student accommodation in such an incredible city.”
The 15-month refinancing term suggests Danehurst may be evaluating options for the asset, though the developer has not disclosed future plans for the scheme. The deal structure provides flexibility as the PBSA sector continues to attract institutional investment despite tightening planning regulations in major university cities.
