Wolverhampton PBSA hits the market for £4.5m

A freshly completed student block has been put up for sale, six months after the building’s owners collapsed into administration.

Construction on the 63-bedroom Cleveland Studios in Wolverhampton begun in 2022, but the project was hit by significant delays due to the collapse of one of the contractors working on the scheme.

The building was eventually completed in November last year, but the delays caused ‘substantial cost overruns’ against the original anticipated budget of approximately £4m, which led to administrators being called in at building owner Cleveland Victoria.

The firm owed around £10m to creditors when it went into administration in February, including £9.7m to the principle lender for the scheme, Kuflink.

Now, the building has been put up for sale by administrators FRP with a price tag of £4.5m, after they decided to operate Cleveland House as a going concern – bringing in PBSA management firm Mezzanino to run the property.

The building is advertised with Watling Real Estate as having a potential rental value of £530,000 per year, and a ten-year lease has now been agreed for part of the 6,000 sq ft ground floor commercial unit.

“Closing the PBSA would have potentially resulted in reputational damage with universities whose students were paced in the property, deteriorated the property asset value and ultimately reduced the saleability of the property,” said FRP, in a progress report filed earlier this year.

“It is envisaged that a four to six month marketing period will be undertaken for the purpose of marketing and selling the property. This is likely to be followed by a further two/three months to facilitate completing the sale. This timeline is considered sufficient to appropriately market the opportunity and maximise sale value. However, the timeline will be regularly reviewed.”

The property is currently advertised with Watling Real Estate.