Investec to fund student accommodation development

Michael Lloyd

September 30, 2019

Investec Structured Property Finance will provide an £8m loan to fund the development of purpose-built student accommodation (PBSA) beds in Colchester, Essex.

The 3-year loan, which also includes an investment term, is for PBSA and private rental sector (PRS) specialists, Osborne.

Ian Burdett, at Investec Structured Property Finance, said: “This high quality PBSA development should be well sought after by the underserved second and third year student population and will provide a great alternative to the traditional HMO offering.

“The defensive characteristics of the PBSA sector, coupled with our successful track record and global relationships, has allowed us to continue to grow our loan book exposure to the asset class, having provided nearly £700m of funding since 2015.

“We are pleased to be working with Osborne for the first time, a well-established and respected property developer.

“Osborne crucially use their own in-house self-build specialist and bring an impressive track record, delivering every student accommodation project on time for new term entrants to move into their new homes. We hope this is the start of a strong working relationship together.”

David Sarson, managing director of property development and investment at Osborne, added: “Investec has a deep understanding of the student accommodation sector and has built a reputation as a market leading provider of development finance for schemes across the UK, which is why they were the obvious choice to work with on this project.

“We look forward to working with them again.”

The direct let scheme which is to be known as Elmstead Place, will serve the 15,000 student University of Essex and is adjacent to the main campus.

Scheduled to open for the start of the 2020/21 academic year, it will cater primarily to second and third year students.

Some 15 townhouses will deliver 123 beds which is a mixture of studios and clusters, with an additional studio block containing a further 12 beds.

Brotherton Real Estate arranged the development facility.

Tanya Wolfe, director of Brotherton, commented: “We are delighted to have assisted Osborne and Investec with arranging and closing the debt finance on this exciting PBSA development in Colchester.

“Osborne are an excellent sponsor with proven track record as both developer and contractor, and we are confident Investec will be a great lending partner for them on this transaction.”

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