Barings is forward-funding the development of two purpose-built student accommodation (PBSA) buildings in London and Manchester, on behalf of a value-add investment strategy, for a total of £43.8 mln (€50 mln).
The transaction is Barings' first PBSA investment in Europe and marks the start of a wider Living investment strategy in the firm's key jurisdictions including the Nordics, the Netherlands, Germany, the UK, Italy, France and Spain, according to Gunther Deutsch, head of real estate transactions – Europe at Barings. 'We are targeting €350 mln of investments across PBSA, Build to Rent and micro/serviced living and will work with strong and experienced developers as we build our product pipeline and increase investment volumes,' he said.
Both properties are expected to be completed in time for the 2022/23 academic year and are being developed by Alumno, a specialist PBSA developer that has delivered over 8,000 student accommodation beds across the UK. Once complete, the 4,600 m2 development in London will comprise 143 beds across a range of en-suite rooms in cluster flats and studio accommodation. It is located on Bermondsey Spa Gardens, less than 10 minutes’ walk from the local Zone 2 London Underground station and with good access to a number of higher educational institutions.
The site in Manchester will be developed into a 1,100 m2 building containing 62 studios. It is in a central location that is highly accessible by foot, bus and national cycle routes and sits within the campus of Manchester Metropolitan University.
Both properties, which are expected to achieve a BREEAM ‘Very Good’ rating, will provide amenities including a managed reception, indoor and outdoor multi-functional common areas, bike storage, cinema rooms and high speed WIFI.
Darren Hutchinson, managing director and head of UK real estate transactions at Barings, added: 'These are two high quality PBSA assets in very strong locations in London and Manchester, which are both undersupplied markets supported by strong universities and a deep occupier demand. We are excited to work with Alumno to create well designed, contemporary accommodation that will appeal to a wide range of students.'
