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£200M Of Debt Deals Boost UK's Booming Student Sector

Maslow has backed Union Property Development's refurb plans for Paddington.

The UK student accommodation market continues to outperform historic investment levels, with two new deals across a number of UK cities bolstering the sector further.

Real estate development finance specialist Maslow Capital has completed a £114M development facility for Union Property Development’s 356-bed purpose-built student accommodation scheme in Paddington, London.

Separately, Investec Real Estate has provided Global Student Accommodation with an £85M loan to support the refinance and partial refurbishment of five UK PBSA assets.

Investment in the UK student accommodation sector totalled a record £7.2B in 2022, up 69% year-on-year and significantly higher than the average of £4.1B over the previous five years, according to Knight Frank.

Currently, there are an estimated 95,000 new bed spaces in the planning pipeline, well below anticipated future demand.

The Paddington redevelopment will see an existing PBSA asset undergo a refurbishment and reconfiguration programme to offer modern living spaces, plus a wide range of amenities, including bookable kitchen/dining and games spaces, social and events space, a resident’s lounge, study areas, a laptop bar, a gym, a laundry and internal cycle storage.

Established in 2009, Maslow has provided a total of £372M in financing packages recently and focuses mainly on residential, private rented sector, mixed-use and PBSA developments.

"Our team's commitment and efforts enabled us to complete this transaction in just eight weeks from credit approval. To date, Maslow has funded over 4,800 PBSA beds,” Maslow Capital Head of Deal Origination Emma Burke said.

Meanwhile, Investec is helping finance the refurbishment of properties providing a total of 1,460 beds to students in London, Lincoln, Newcastle, Nottingham and Sheffield, managed by GSA’s operating partner, Yugo.

Refurbishment will focus on improving bedrooms and communal spaces.

Last year, Investec passed the £1B student accommodation lending milestone, having funded 22,000 beds across 55 schemes in 23 UK cities since 2011. This is Investec’s first deal with GSA, which is active in nine countries and has a presence in 70 cities.

“We will continue to fund PBSA schemes in those cities where the demand dynamics remain compelling, reflecting our conviction in the sector’s long-term outlook due to its structural undersupply, demographic tailwinds and defensive characteristics in this inflationary environment,” Investec Real Estate loan originator Sebastian Walley said.