Barings has provided a £140 million eight-year fixed rate loan, on behalf of two institutional investors, to the London Student Accommodation Venture (LSAV), a joint venture between Unite Group and GIC.
The loan is secured against two London student accommodation properties, which are being acquired by LSAV from Unite Students for £342 million.
The properties are located in Wembley and Whitechapel and offer 1,358 bed spaces, of which the majority are directly let to students. The Wembley asset, Arch View House, was completed ahead of the 2020/21 academic year, while the Whitechapel property is less than ten years old and has an excellent trading history, with 98-100% occupancy achieved over the last four academic years, prior to the pandemic.
Unite Students will continue to manage and operate the two London properties under its management agreement with LSAV.
Both assets are of high quality with excellent amenities, communal areas and accessibility provision. They are well located in London and benefit from strong transport links.
This loan follows a £124 million facility provided by Barings to Unite Students in 2014 and was repaid in July 2020.
“These modern properties are finished to a very high standard and are well located to meet the demands of students attending London’s numerous, world-renowned educational institutions. We look forward to working with Unite Students and GIC through their London Student Accommodation Venture and supporting them over the coming years. This new facility extends our long-standing relationship with Unite Students and underlines our commitment and conviction in the outlook for UK student accommodation sector, which continues to benefit from strong underlying demographic trends, despite the challenges faced during the pandemic,” said Chris Bates, Head of Europe Real Estate Debt Origination at Barings.
Joe Lister, Chief Finance Officer of Unite Students, added: “We are delighted to renew our partnership with Barings with this new financing facility, which supports the growth of our LSAV joint venture.”