Aviva Investors and M&G Investments have completed a £100 million refinancing deal with London-based Student accommodation developer-operator Urbanest for its landmark purpose-built student accommodation (‘PBSA’) scheme in Vauxhall.
Each lender has provided £50 million, in an extension of their existing £350 million investment facility with Urbanest. The new lending is primarily against Urbanest’s newest operational building on Miles Street, which opened in September 2018.
The award winning 454-bed 32-storey red brick tower, built by Balfour Beatty for Urbanest in the style of New York’s iconic Flat Iron, looks out over the new U.S. Embassy and Battersea Power Station. It was designed by Glenn Howells Architects and has achieved BREEAM “Excellent”.
The existing £350 million loan completed in 2016, secured on 2,520 PBSA beds between five prime operational Urbanest assets around Zone 1 London.
With properties in Hoxton, King’s Cross, Tower Bridge, St Pancras and Westminster Bridge, the addition of the Vauxhall property to the existing security pool has strong synergies and brings total beds to nearly 3,000.
The facility is a 50/50 bilateral agreement with funds managed by Aviva Investors and M&G Investments, maturing in mid-2027.
Gregor Bamert, Head of Real Estate Finance at Aviva Investors, said:
“Strong demand for university places and PBSA in central London make this an attractive sector that is aligned with our long-term investment strategy. We are pleased to build the relationship with both M&G and Urbanest, an existing borrower with a formidable track record in this sector.”
Johnny Manns, Head of Major Development at Urbanest, said:
“Since founding Urbanest alongside business partners and investors M3, we have seen institutional appetite for well-designed prime PBSA – particularly in London – go from strength to strength. Our team has been delighted to meaningfully grow an existing valued relationship with lenders Aviva and M&G on completion of our latest operationally stabilised scheme in Vauxhall.”
Adam Willis, Associate Director in M&G’s Real Estate Finance team, said:
“Urbanest is one of the leading operators and developers of high quality student housing. Its long-term investment outlook together with strong university relationships align well with our lending strategy.
“We are pleased to have partnered once more with Aviva and Urbanest, and to have grown our sector exposure to student housing, which remains an attractive asset class for our pension fund investors and other institutional clients.”