Property lender Investec Real Estate has provided a development loan to fund the construction of a purpose-built student accommodation (PBSA) scheme in Stratford, East London, with a gross development value of £120 mln (€141 mln).
The loan was provided to a joint venture between Watkin Jones, the UK developer and manager of residential for rent, and Housing Growth Partnership, the Lloyds-backed equity investor.
The deal brings Investec’s provision of PBSA finance since 2011 to over £1.1 bn. According to CBRE and QX Global, the gap between demand for PBSA and available supply in London, which has the highest density of leading universities of any global city, currently stands at some 105,000 full-time students.
Targeting completion in time for the start of the 2026/27 academic year, the development will comprise 397 rooms and circa 2,000 m2 of commercial space. It is located near UCL East and UAL’s London College of Fashion campuses in the Queen Elizabeth Olympic Park, as well as the nearby Birkbeck College and UEL University Square Stratford campus.
In addition, the asset’s micro location, being only a short walk from Stratford station, offers an easy commute to campuses across the capital via the train, tube and DLR, Investec said.
In line with Investec’s commitment to supporting the delivery of fit-for-purpose real estate that meets future minimum energy efficiency requirements, the development is targeting a BREEAM ‘Excellent’ certification.
Alice Harman, originator at Investec Real Estate, commented: 'The investment case for UK PBSA remains highly compelling, underpinned by supportive structural and demographic trends.
'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.'
George Dyer, group investment director at Watkin Jones, added: 'We are delighted to continue our longstanding relationship with Investec Real Estate. Following the successful establishment of our joint venture with HGP, this development debt facility will enable delivery of Grove Crescent Road, Stratford in time for the 2026/27 academic year.
'Once complete, the scheme will deliver much needed high quality student accommodation, offering strong ESG credentials, into one of London’s fastest growing sub-markets.'
