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Investec Real Estate has provided a joint venture between residential for-rent developer and manager Watkin Jones and Housing Growth Partnership, the Lloyds Banking Group-backed equity investor, with a loan to fund the construction of a purpose-built student accommodation scheme in Stratford.
With a gross development value of about £120M, the loan takes Investec’s provision of PBSA finance since 2011 to more than £1.1B, with completion of the scheme targeted for the start of the 2026-2027 academic year and the developers seeking a BREEAM Excellent certification.
The project will total 397 rooms and circa 21,500 SF of commercial space. It is located to serve the nearly 14,000 students studying at UCL East and the University of the Arts London College of Fashion campuses in the Queen Elizabeth Olympic Park, as well as the nearby Birkbeck College and University of East London University Square Stratford campus.
“The investment case for UK PBSA remains highly compelling, underpinned by supportive structural and demographic trends,” Investec Real Estate Originator Alice Harman said in a statement. “London in particular, with its concentration of leading higher education institutions and enduring global appeal, coupled with higher land costs and high private sector rents, continues to witness strong capital and rental growth.
“Importantly, the scheme’s environmental and social credentials align with both our own lending strategy and the demands of today’s students, whilst future proofing it from potential obsolescence.”
Investec has identified the living sector as a major investment opportunity. Its future living report, published in October last year, revealed that 46% of respondents to its investment survey were considering investing in co-living in the next five years and that investment activity in the sector had doubled since 2021.
In May, Investec Real Estate confirmed a £55M loan to PBSA and living specialist Scape Group to fund the development of a co-living scheme in Walthamstow in what was the company’s third facility in the sector. Investec’s previous co-living activity included providing a joint venture between Scape Group and HG Construction with a £53.5M senior debt facility in 2021 to fund 403 PBSA beds and 113 Morro living units in Guildford, Surrey.
For all the latest on the PBSA sector, Bisnow is running its latest UK Living Series: Student Accommodation Summit on 4 September at One Bartholomew Close, Barts Square, London. For more information, click here.
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