UK student accommodation developer Urbanest has been granted a £350 mln (€407 mln) loan from Aviva Investors Real Estate Finance and M&G Investments, in one of the biggest refinancing deals of the year.
The senior facility is secured against Urbanest’s 2,520-bed portfolio of purpose built student accommodation (PBSA). It represents a loan-to-value ratio of 55% at closing and matures in mid-2027. Both lenders hold a 50% position.
Vicky Skinner, finance director at Urbanest, said: 'This transaction consolidates the existing lending position of the business, replacing three loans with a single 11.5-year bilateral facility. Securing long-dated, fixed-rate finance at an attractive point in the market cycle was a core objective of Urbanest, as the business continues to invest in the existing portfolio and explore opportunities for expansion.'
The company owns five residential schemes in London aimed at wealthy international students, with Zone 1 locations including Hoxton, King's Cross, Tower Bridge, St Pancras and Westminster Bridge. The latter scheme, a 1,140-bed property in SE1 which opened in 2015 opposite the Houses of Parliament, achieved BREEAM 'Excellent' and includes a gym, swimming pool and sauna.
Urbanest is currently developing a sixth property in Vauxhall and said it planned to double its portfolio from 2,520 to 5,000 beds by 2021.
Lynn Gilbert, head of senior commercial mortgages at M&G Investments, said:'This was a rare opportunity to gain exposure to institutional-quality Zone 1 London assets backed by a class-leading operator with a similar long-term investment outlook to our own. In a market where demand for university places and student housing continues to outstrip supply, this deal underlines investors’ confidence in the long-term prospects for student housing in central London.'
