Investec Real Estate is stepping up its involvement in the UK co-living market by providing a £55 mln (€64 mln) loan to PBSA and Living unit provider Scape Group.
This loan will fund the development and initial operations of a high-quality co-living space in Walthamstow, London.
This marks Investec's third investment in the co-living sector, which is seen as an attractive market due to factors like rising housing costs and the growing trend of hybrid work models.
Scape has approval to build a 321-bed co-living facility at 1 Blackhorse Lane in East London. Their "Morro" brand will manage the space, which is expected to be completed in 2025. The development aims for top sustainability ratings (EPC A and BREEAM Excellent) and will offer shared living areas, a ground-floor cafe with retail space, and a dedicated music and comedy venue. The location boasts excellent transport links with Blackhorse Road station right across the street, providing access to both the Victoria Line and Overground networks.
Hollie Sleigh at Investec Real Estate commented: ‘With demand for high quality, well-connected rental accommodation in London continuing to outstrip supply, the appeal of co-living as an asset class to both investors and residents is pushing this nascent sector further into the mainstream. This Blackhorse Lane transaction is an exciting expansion of our exposure to the co-living space, which we believe is very underinvested, and will enable Scape Group to grow and enhance its portfolio. This is our sixth loan with Scape Group, whose track record in sourcing and delivering highly desirable and extremely well-managed PBSA and living assets speaks for itself.’
Adam Brockley, founder & chief development officer at Scape Group, said: ‘With our growing pipeline of Morro and Scape PBSA developments we look forward to continuing our well-established relationships with both Investec and APG. Our growth strategy remains as ambitious as ever - we’re actively seeking new opportunities in the PBSA and living spaces.’
Charles Moran, planning director at Scape Group, added: ‘We are excited to bring this scheme forward and open our first Morro building in central London. We’ve had incredible support from Waltham Forest Council who have seen the value in our proposition for their growing community.’
In a previous deal, Investec provided a £53.5 mln (€62.8 mln) loan to a partnership between Scape Group and HG Construction in 2021 for a development in Guildford that included 403 student beds (PBSA) and 113 co-living units under Scape's Morro brand.
