M&G Investments is providing £36.9m (€46.7m) of finance for the redevelopment of a London student residence for music students.
The investor said it would redevelop College Hall, the main student residence for the Royal College of Music.
M&G has also bought the 125-year lease on the west London property.
Campus Living Villages will manage the redevelopment and then operate the accommodation on completion.
M&G said the residence would then be leased to the college and CLV for 45 years, with annual, inflation-linked reviews.
Most of the rent is guaranteed by the colleague, with an option to acquire the residence at the end of the 45-year lease.
Capital for the deal, M&G said, is coming from pension fund clients.
Ben Jones, director of real estate income at M&G Investments, said the deal demonstrated the willingness of institutional investors to invest in student accommodation.
M&G Real Estate has invested more than £4.5bn in long-lease strategies, of which £2bn has been for M&G’s seven-year-old Secured Property Income Fund.
The fund has invested in supermarkets, hotels and offices.
In the leisure sector, M&G this year spent £92m on a portfolio of Bannatyne’s Health Clubs.
SPIF made its first disposal earlier this year, selling a Sainsbury’s supermarket in Worcester to the BP Pension Scheme for £27.25m.
The sale came as M&G saw more value in larger investments, operational assets and development finance.
