Future Generation refinances £39 million development loan
Student accommodation specialist Future Generation has refinanced a £39 million development loan that will partly fund construction of the third phase of a major Sheffield PBSA scheme.
It comes at the end of a remarkable five days of dealmaking for the company, which — despite turmoil in global markets due to coronavirus — saw it secure another £55million development loan to construct two other PBSA schemes in Loughborough and Nottingham.
The completion of these contracts in the face of unprecedented economic uncertainty has underlined the long-term strength of the student housing in the UK.
The work on the final phase of Steel City, Sheffield, is being funded by the refinancing of another Maslow Capital development loan that covered construction of both Steel City and the completed Future Generation PBSA scheme, Hythe Mills, in Colchester, Essex. The new lending from a fund advised by DRC Capital, steered to completion by Graham Fasham, a Principal at the firm, represents a long-term investment now that the development phase is almost entirely complete.
The third phase of Steel City will create 19 short-let serviced apartments — in addition to the scheme’s existing 324 bedrooms — to be used by parents and friends visiting student tenants. The concept is designed to make it much easier for students living away at university to maintain relationships with friends and family.
This is part of Future Generation’s unique approach to mental wellbeing, which sees all staff working at its PBSA schemes obtaining either a Level 1 or Level 2 Certificate in Mental Health Awareness, awarded by Training Qualifications UK (TQUK). The service apartments are being delivered by Southern Grove’s hospitality team led by Tim Barrett, who joined the company from Marriott.
The £35million scheme also boasts an interactive fitness studio plus Future Generation’s signature Sky Lounge — a rooftop social space where students can relax, interact and enjoy cityscape views. Construction of the third phase is expected to be completed by the spring of 2021 and a construction partner is yet to be chosen.
Steel City and Hythe Mills have both been fully let since September 2019.
Hythe Mills is a £25million, 229-bedroom student scheme containing an interactive fitness studio and riverside networking hub. The fitness suite is equipped with virtual training programs including Spin, Body Pump and Body Combat — all delivered in partnership with world-leading group fitness specialist Les Mills.
Andrew Southern, Chairman of Southern Grove and Future Generation, said:
“The fact that these funding facilities are still coming together, even with Covid-19 wreaking havoc on industry and economies around the world, is testament to the long-term security of the student accommodation sector in the UK. We are going to weather this storm and come out of it even stronger, with positive consequences for the incomes of those firms and workers who help us to make these developments a reality.
The completion of Steel City will also be an incredibly proud moment for me personally. Sheffield is my home town and I still have plenty of family and friends there.
It is a pioneering example of everything we’re trying to achieve nationally, transforming people’s expectations of student accommodation in terms of design and quality.”