Developer secures £125m loan for student digs in the City

Sebastian McCarthy
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The Aldgate development will also provide 60,000 square feet of Grade-A office accommodation

University pads might be more typically associated with sprawling campuses than the City of London’s cramped financial district, but developers today secured a multi-million pound loan for a landmark student accommodation scheme within the Square Mile.

In a fresh sign of the booming investor appetite for London’s student property assets, developer and student accommodation operator Urbanest has agreed a £125m financing deal with M&G Investments to build a 650-bed block for students from King’s College London.

The Aldgate development, which will also provide 60,000 square feet of Grade-A office accommodation, is working with Museum of London to incorporate archaeological remains of a bastion tower and part of the fourth century Roman wall into the project.

“This is Urbanest’s most ambitious student-led mixed-use development to date, providing a unique blend of student housing, heritage, entrepreneurial innovation, commerce and leisure space uses which will sit alongside and complement each other in the completed scheme,” according to Vicky Skinner, chief financial officer at Urbanest.

Adam Willis, associate director in M&G’s real estate finance team, added: “We continue to see increasing demand for student accommodation in the capital and this deal provides our institutional investors with access to attractive returns secured against high quality real estate in London’s city centre.”

According to real estate advisor CBRE, UK student accommodation continues to gather momentum amongst investors, with capital values increasing 6.5 per cent year on year (to September 2018), rising from 4.5 per cent recorded in the previous year.