Octopus Real Estate provides £26 million development finance for 398-bed Birmingham student accommodation scheme
Octopus Real Estate, part of Octopus Group and a leading UK specialist real estate lender and investor, has agreed to provide a £26 million development finance facility to deliver a 398-bed Purpose Built Student Accommodation (“PBSA”), in central Birmingham.
The property, located on Upper Dean Street, is situated within a 15-minute walk of three of Birmingham’s main universities; Aston University, Birmingham City University (City Centre Campus) and the Birmingham School of Art. The accommodation is also placed within walking distance of Birmingham’s two main train stations – Birmingham New Street and Birmingham Moor Street – while being well located for local amenities and a short walk from the city’s popular Bullring shopping centre.
The PBSA finance agreement is the second to be completed in several months between Octopus Real Estate and property developer Bricks Capital, following a £21 million agreement to deliver a 315-bed PSBA in Glasgow in October. The loan highlights Octopus Real Estate’s continued focus on the PBSA market, having funded more than £175 million in PBSA deals within the last year alone.
Bricks Capital currently has five PBSA developments under construction, and already has a presence in Newcastle, operating under its ‘True Student’ brand. The Birmingham site is scheduled to be complete and ready to welcome students at the start of the 2020 academic year.
Gavin Eustace, pictured, Head of Development at Octopus Real Estate, said:
“We’re always on the lookout for opportunities in the PBSA sector, and this latest deal with Bricks is another quality PBSA development that will help support students in their academic performance and enhance their university experience. Cities such as Birmingham, with several academic institutions and a large student population, provide a great opportunity for developers.”
Peter Prickett, CEO of Bricks Capital, commented:
“With close to 70,000 full time students, Birmingham is an ideal city to develop high-end student accommodation for our ‘True Student’ brand to operate. True Student has provided an unparalleled experience to thousands of students and we look forward to extending this to the Birmingham market.
“This is the second major PBSA development we have worked with Octopus Real Estate on over several months. They are a great team to work with, and we are excited to continue this relationship with a company that shares our vision for the exciting potential in the market.”
Recent research by Octopus Real Estate revealed the significant difference student accommodation has on academic performance and mental and physical health1. It also revealed that students expect more from their accommodation and are willing to pay more to get it. Of the students surveyed:
- 68% would pay an average of £92 extra per month to have their own cooking facilities
- 57% would be prepared to pay an extra £79 per month, on average, for a gym as part of their accommodation
- 76% said they would pay more rent – at an average of £115 extra per month – for a private bathroom