Curlew Capital has completed a new €50.9m (£44m) senior loan with Lloyds Bank Commercial Banking. The SONIA-linked facility will fund the development of 550 student beds across three purpose-built student accommodation (PBSA) schemes, located in Brighton, Bath and Bermondsey. The three-year facility represents the first transaction between Curlew and Lloyds Bank and will support the construction all the way through to stabilisation. The three highly amenitised schemes, all located in markets characterised by a structural undersupply of institutional grade product, will offer a mix of studios and clusters. Each development will incorporate the latest in sustainable building design, including low water and energy consumption and an astute selection of construction materials with lower CO2 output than more traditional options. The three assets are:
- A 185-bed scheme occupying a prime Zone 2 location in Bermondsey, which is expected to complete for the start of the 2022/23 academic year and is targeting a BREEAM Excellent certification
- A 232-bed scheme on London Road, Brighton, a short walk from the railway station, which is expected to complete this summer and is targeting a BREEAM Excellent certification
- A 138-bed development in Bath, which is expected to complete for the start of the 2022/23 academic year
Reflecting its confidence in the long-term structural drivers underpinning the sector, Curlew is currently bringing forward six PBSA schemes totalling c. 1,600 beds across the UK, as it targets the delivery of c. 5,000 beds over the next three years. This most recent development milestone follows the announcement earlier this month that Curlew had received a resolution to grant planning for a 282-room purpose-built student accommodation development in Stratford, East London, further expanding its footprint in what is a leading global centre of higher education.
Brett Robinson, CFO at Curlew Capital, commented: “This transaction is a key milestone in the delivery of our development pipeline. In Lloyds Bank we have a partner that shares our conviction in the sector’s favourable outlook, and who have a long track record of funding successful student accommodation schemes across the UK. As important, they are also aligned with our commitment to deliver highly sustainable buildings which contribute to the ecosystem of their local community. Despite the well-publicised headwinds faced last year, the longer-term fundamentals for the PBSA sector remain highly compelling, with reservation rates for the upcoming academic year providing further evidence of the sector’s resilience. We have an ambitious development pipeline as we position ourselves as a key player in meeting what we believe will be growing demand from both domestic and overseas students in the coming years.”
Sam Shah, Director and Alternative Residential Lead, Lloyds Bank Commercial Banking, added: “We are excited to be initiating a lending relationship with Curlew through the financing of three high-quality PBSA assets and in doing so to continue our support for the student economy. Whilst the UK PBSA sector has experienced some stress as a direct consequence of the pandemic, the broader investment thesis is still in favour of high-quality stock in markets where there continues to be a demand/supply imbalance. We look forward to working with the management team as they continue to grow its portfolio.”
