Modular development specialist Stelling Properties Group has secured a £12 mln (€14 mln) loan from Investec Real Estate to finance the construction of a modular purpose-built student accommodation (PBSA) scheme in Southampton.
The 122-studio scheme, which will be operated by Unilife, is due to complete in time for the 2024/25 academic year.
Located in Southampton City Centre, it is being constructed on a former Bank of England site where the high street frontage, which is Grade II-listed, will be retained as part of the development.
Features will include communal socialising and amenity areas across its five storeys, as well as a restaurant and bar on the ground floor.
Specialists in modular construction, Stelling will be manufacturing the property offsite at its factory in Hampshire.
Southampton has a significant undersupply of PBSA, with rising student numbers across two universities putting pressure on existing stock, combined with a relatively limited pipeline of additional schemes to meet this increasing demand.
According to data from StudentCrowd, Southampton, alongside Durham and Glasgow, has the lowest PBSA availability for the 2023/24 year.
This is Investec’s second transaction with Stelling, having previously supported them with a £11 mln senior facility to fund the development of Riverside House, a 99-studio student scheme in Guildford.
Investec’s financing of modular schemes aligns with its approach to supporting the delivery of buildings with strong sustainability credentials.
Ian Burdett, Investec Real Estate, commented: 'Our latest Future Living report highlighted the strong prospects for the UK student accommodation sector and this transaction builds on our market leading track record in this space, in what is a critically undersupplied market.
'Working with repeat borrowers has been key to our loan book resilience, and Stelling’s innovative utilisation of modular construction methods ensures they deliver high quality schemes in an efficient and sustainable manner.'
Jose Ignacio Alvarez, at Stelling Properties, added: 'We are thrilled to be partnering with Investec once again, following the success of Riverside House in Guilford.'
