Octopus Property has financed a 502-bed central England student accommodation development with a £36m (€41m) loan.

The specialist UK property lender said it has agreed to provide EREC Estates with the loan for the development of the purpose-built student accommodation (PBSA) scheme in Coventry.

The scheme is expected to be completed in time for the start of the 2019/20 academic year.

Gavin Eustace, the head of residential development at Octopus Property, said: “Whilst we are seeing some geographical polarisation caused by oversupply, the student accommodation sector remains one of the most attractive asset classes for investors.

“It’s a sector that we like, and as long as the broader favourable supply-demand dynamics remain in place for this type of innovative and high specification accommodation, we will continue to back schemes that require bespoke and efficient financing facilities.”

The 27-month facility marks the third collaboration between Octopus and EREC, following two smaller PBSA developments in Leicester and Coventry.

Octopus said this loan represents its largest single development deal.