Cornerstone Real Estate Advisers Europe has completed a £124 million (approx. €149 million) senior loan for UNITE Group, the UK’s largest developer and manager of student accommodation, on behalf of a client. The loan is provided for a ten year term, at a 50% loan to value, and is secured against a portfolio of four student accommodation properties in London, Bristol, Sheffield and Coventry, totaling 3,023 beds.
The principal asset in the portfolio is UNITE’s Moonraker asset in Southwark, London, which is a prime student accommodation block comprising 674 beds in both studios and ‘cluster flats’. The property, which was completed in 2012, is occupied under a 20-year Nominations Agreement with Kings College London.
This transaction represents further progress in Cornerstone’s strategy of extending its US$28 billion US real estate lending platform into Europe with £305 million of senior debt invested in the UK over the last quarter.
Chris Bates, Director - Head of Real Estate Finance at Cornerstone, said: “We have developed a strong relationship with UNITE, which ensured that this significant transaction was closed within a month of agreeing terms. The transaction is another example of our proven ability to originate and execute large ticket financing opportunities with high calibre counterparties secured against quality income generating assets. We are exploring a number of other investment opportunities with similar characteristics as we continue to expand our European debt platform.”
Charles Weeks, CEO of Cornerstone Europe, said: “This transaction and the continued expansion of our European lending platform complements the established debt programme that we have in the United States. We look forward to expanding our debt products across the capital stack in all of our territories, with the intention of positioning Cornerstone at the forefront of the commercial real estate lending market in Europe.”
Joe Lister, Chief Financial Officer for the UNITE Group, said: “We are delighted to complete this loan with Cornerstone Europe, a new relationship for UNITE. This transaction builds on the Group’s success during 2013 and marks the conclusion of our planned refinancing programme having raised £1.1 billion over the last 12 months. We have delivered on our strategy to diversify sources of funds, extend loan maturities and reduce the cost of debt.”
Source: FTI Consulting