ADIB provides AED 124 million structured financing for prime purpose-built student accommodation

By Bridging Loan Directory 17th August 2021

Abu Dhabi Islamic Bank (ADIB), a leading financial institution, has provided structured financing of AED 124 million (£24 million) through its UK operation supporting Bahrain based Blacksand with their latest acquisition.

Blacksand is a UK focused property company, which owns a diversified property portfolio ranging from offices to student accommodation as well as residential development projects.

The subject property (known as Vibe Student Living) comprises a high quality, purpose-built student accommodation (“PBSA”) asset situated in Kingston-upon-Thames, which was completed in February 2018.

The property provides 300 fully furnished units across 111 studios and 189 en-suite cluster bed spaces. Facilities include gym, indoor cinema, cleaning service, bicycles to rent, study pods, lounges and a laundry room.

The property also has a retail unit on the ground floor leased to Europcar for an unexpired lease term of 8 years (no tenant break options).

Paul Maisfield, Head of UK Real Estate at ADIB, said:

“We are delighted to have supported Blacksand on this transaction and we look forward to continuing to support the execution of their UK commercial real estate investment strategy, targeting prime regional assets with good income visibility and strong tenant covenants with a focus on cash yield.

The appetite amongst our GCC investors remains strong for quality UK real estate, particularly assets that have demonstrated resilience during the pandemic, with underlying strong fundamentals.

Despite the unparalleled uncertainty during the last academic cycle, investors continue to view the UK PBSA sector favourably.

The market has performed stronger than expected throughout the crisis, with reports of robust booking and occupancy rates.

This was reflected on the subject property, which maintained 95% occupancy during the 2020/21 academic year and has secured 100% bookings for 2021/22.

The outlook for the PBSA sector for 2021 is strong and we anticipate demand to increase in the next few years.

The message from the government remains positive with ambitions to double international student numbers; the allure of a British education continues to appeal, and overall the reputation of PBSA as a counter-cyclical asset class, remains at the forefront of its attraction to investors.”