Octopus Property has progressed its regional expansion with the provision of a £20m (€22.5m) development loan to MCR Property Group to finance a 163-unit Edinburgh residential scheme.

The specialist property lender said it will provide the property developer with the loan, to help convert a former office building in the Scottish capital into apartments.

Located on Gorgie Road in the sought after Chesser suburb, 1.5 miles from the City Centre, the site benefits from its close proximity to both; the Bal Gram tram station, which connects to Princes Street and Edinburgh airport; and the Edinburgh ring road.

The latest deal continues Octopus Property’s regional expansion and follows the July provision of a £10m Edinburgh Marina acquisition loan.

Gavin Eustace, the head of residential development at Octopus Property, said: “This is an exciting project to be involved with, in what is one of Europe’s most dynamic and strong performing cities.

“We are particularly comfortable working alongside a developer with a track record of delivering high-quality schemes across the UK and hope this is the start of a long and mutually beneficial relationship.”

The private apartments have been renamed Embankment West and will be sold by MCR’s residential sales arm, Regency Residential.

Chris Taylor, the managing director of Regency Residential, said: “Edinburgh’s population exceeds half a million and is growing, but there continues to be a major issue with undersupply of quality homes.

“Considering the city’s documented potential, developing residential space is absolutely key.”

An earlier version of this story misstated the number of apartments being built.