Legal & General forward funds student accommodation in Elephant & Castle
Legal & General Property (LGP) has agreed to forward fund a student accommodation scheme in Elephant & Castle, London for a total consideration of £25.7m.
One of the most active investors in the sector, the deal represents Legal & General’s fifth forward funding of a major university-backed scheme, having invested approximately £330m in the last two years, as well as having secured a £121m, 10 year debt facility to Unite.
The development is pre-let to University of the Arts London (UAL) on a long lease term. The scheme will comprise 221 en-suite cluster rooms and student rooms and is scheduled for completion in August 2015, ready for occupation the following month to coincide with the start of the academic year.
Situated close to Elephant & Castle station, on a site that borders Hampton Street to the north and Steedman Street to the south, it is positioned in an area of major regeneration and investment. Additionally, a first-class location for student accommodation, it lies adjacent to Unite’s 230-bed student accommodation block, and close to Victoria Halls’ 232 bed student block and the Strata residential tower, benefiting from Zone 1 transport links.
The developer, Spiritbond Elephant & Castle, is a 50/50 joint venture between Spiritbond and Watkin Jones Group, both of whom are experienced developers of student accommodation with strong records for delivering high quality schemes on time. Furthermore, the scheme is targeting a BREEAM Excellent rating.
The second student accommodation deal agreed with a long term pre-let in place to UAL, it follows LGP’s forward funding of a 475-bed site in Finsbury Park earlier this year for over GBP57m, which was also developed by Spiritbond and Watkin Jones Group. With over 18,500 students from 114 countries, UAL is the largest specialist arts and design university in Europe, with a ratio of six applications for every place offered.
Adam Kerr, head of long income transactions at Legal & General Property, said:
“Representing the fifth significant student accommodation funding that has been undertaken by LGP in the last two years, this transaction demonstrates our continued ability to source rare opportunities in this attractive sector where there is a long lease in place and the income is underpinned by a strong university covenant.”