Legal & General to forward fund student accommodation development
Legal & General Property (LGP) has agreed to forward fund a student accommodation scheme in Finsbury Park, London, for a total consideration in excess of GBP57m.
The development is pre-let to the University of Arts London (UAL) on a 25-year FRI lease from completion, with annual RPI reviews capped at five per cent and floored at one per cent.
Situated very close to Finsbury Park station, the scheme will comprise 475 en-suite cluster rooms and studio rooms, as well as café areas and bike storage facilities.
Construction is due to start early this year, with completion scheduled for August 2015 making it ready for occupation at the beginning of that academic year. The property has been designed to achieve a BREEAM rating of Excellent and includes green roofs amongst other sustainable features.
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. It is made up of six distinctive colleges, which are Camberwell College of Arts, Central St Martins College of Art & Design, Chelsea College of Art & Design, London College of Communication, London College of Fashion and Wimbledon College of Art.
Gordon Aitchison, director of investment and development at Legal & General Property, said:
“This represents the fourth significant funding deal pre-let to a major university that has been undertaken by LGP in the last 18 months, following similar deals with Imperial College, the University of Southampton and the University of Greenwich. This sector offers our funds the opportunity to invest in index-linked income on very long leases to strong covenants, whilst also providing relatively higher yields than the traditional real estate sectors. Our focus remains on funding quality developments that are backed by premium universities and located in first class locations.”