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Investec provides GSA with £85m loan to refinance and refurbish UK assets

Investec Real Estate (“Investec”) has provided Global Student Accommodation (“GSA”), the global leader in purpose-built student accommodation (“PBSA”), with an £85 million loan to support the refinance and partial refurbishment of five UK PBSA assets.

The properties provide a total of 1,460 beds to students in London, Lincoln, Newcastle, Nottingham, and Sheffield, and are managed by GSA’s operating partner, Yugo. Refurbishment activity will focus on improving bedrooms and communal spaces, responding to the evolving demands of today’s student customers, and supporting their wellbeing during their time at university.

Investment in the UK student accommodation sector totalled a record £7.2 billion in 2022, up 69% year-on-year and significantly higher than the long-term average of £4.1 billion over the previous five years1. Currently, there are an estimated 95,000 new bed spaces in the planning pipeline, which will not meet the demand of the 263,000 additional full-time undergraduates anticipated between now and 20302.

2022 saw Investec pass the £1 billion student accommodation lending milestone, having funded 22,000 beds across 55 schemes in 23 UK cities since 2011. This is Investec’s first deal with GSA, which is active in 9 countries and has a presence in 70 of the world’s leading educational cities.

Sebastian Walley, Investec Real Estate, commented: “We will continue to fund PBSA schemes in those cities where the demand dynamics remain compelling, reflecting our conviction in the sector’s long-term outlook due to its structural undersupply, demographic tailwinds and defensive characteristics in this inflationary environment. GSA is a world-renowned player in the PBSA space and we look forward to supporting them on future opportunities.”

John Jacobs, Global Head of Capital Markets at GSA, added: “I am delighted to have formed this new relationship with Investec. Completing this refinancing amidst challenging market conditions demonstrates lenders’ confidence in the strength and resilience of the PBSA sector and their continued appetite to support high quality, stable portfolios with experienced owners and operators. I look forward to continuing to work with the Investec team as we implement our growth strategy in the UK.”

[1]Knight Frank – 2023 Student Property Report
[2] ibid

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