Student accommodation developer Danehurst has secured an £18m loan to refinance The Pepper Mill, a 155-studio PBSA development in Bonnington, Edinburgh. The facility, provided by Secure Trust Bank Real Estate Finance at 63% LTV, gives Danehurst an initial term of 15 months to retain the asset.
The Pepper Mill reached practical completion in time for the current academic year. Studios on the upper floors look out over Edinburgh Castle, while residents have access to a lounge, gym, library, cinema room and games room. The development adds to Danehurst's existing PBSA portfolio, which includes schemes in Southampton and previously Egham, Surrey.
"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. We were happy to welcome students to their spectacular, well-designed studios last year."
The refinancing comes against a backdrop of acute supply pressure in Edinburgh's student accommodation market. Research from Student Crowd, conducted in March 2026, found the city has 23,109 PBSA beds against an estimated demand of 41,325, a shortfall of more than 18,000 places.
Planning constraints are set to make that imbalance harder to address. Edinburgh's City Plan 2030, which came into effect in November 2024, introduced stricter guidelines for PBSA developments, capping studio apartments at 10% of the overall unit mix. Construction on The Pepper Mill had already commenced before the policy took effect, making the scheme one of the last in the city to be delivered under the previous, less restrictive guidelines.
The deal marks the second transaction 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."
Reeves added, "Managing this deal alongside Richard was an extremely valuable experience. Edinburgh is a city close to my heart, and seeing the transformation brought about by Danehurst was a privilege to be a part of. The Pepper Mill provides a standard of accommodation that will certainly add to the experience of students coming to the city, and I'm delighted to have helped bring this project forward."
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