Specialist property lender Octopus Property will provide Atlas Land with a £16m loan to deliver a 225-unit purpose built student accommodation (PBSA) scheme, together with three commercial units, in the heart of Bristol City Centre.
Bristol is home to circa 50,000 university students, enrolled across two major higher education institutions. There are currently in excess of 15,000 PBSA beds in Bristol, whilst the development pipeline for the city is under 4,000 planned bed spaces of which approximately 30% have been granted planning permission.
This means there remains a significant shortage, with undersupply at twice the UK average and a student to bed ratio of 2.2:1.
Gavin Eustace, head of residential development at Octopus Property, said: “The Purpose Built Student Accommodation sector remains one of the most attractive asset classes for investors due its defensive characteristics, whilst the Bristol market, with its above average supply demand imbalance and strong academic tradition, is a particularly compelling market in which to provide development finance.
“With a highly regarded development manager and experienced main contractor in place, we look forward to building a lasting relationship with Atlas Land for the duration of this project and into the future.”
Located on Dean Street, the Atlas Land scheme is approximately one mile from the main University of Bristol campus.
It will just be 400m from Cabot Circus, the City’s main retail/amenity hub as well as student nightlife hotspot, and so is expected to prove popular with students because of its core location.
The 25-month loan is the tenth PBSA transaction for Octopus Property, following last year’s Leicester and Ealing schemes, having lent a total of £70m to support the delivery of c. 800 beds.
Studio Hive Ltd, an established development company based in Bristol, has been appointed to manage the build-out of the scheme, which is expected to be completed in time for the 2020 academic year.
WRW Construction, which has undertaken a number of similar sized PBSA developments, has been awarded the design and build contract.
CRM, a PBSA operators with over 23,000 beds under management, in 32 cities across the UK, will take on the operational management of the scheme once it has completed.
Alan Chaytor, managing director at Atlas Land, added: “This has been a significant investment by Atlas Land in a prime regional centre with a strong university base.
“I am delighted to be working with Octopus property and Studio Hive in delivering a quality PBSA scheme and helping to regenerate a derelict site into a desirable student scheme.”
Jason Collard, managing director at Studio HIVE, said: “This development will add dynamism and new vibrant living spaces to the Dean Street area of St Paul’s, Bristol.
“This will continue the much-needed investment into the St Paul’s Conservation area and continue the urban renaissance currently underway around Portland Square, Bristol.”