Alternative property lender Cohort Capital has funded a £70m facility for the acquisition of Lillian Penson Hall, a 100,000 sq ft PBSA development in the heart of London.
The buyer is LPH Paddington Ltd, a company majority owned by Union Property Developments Ltd.
The 313-unit, eight storey building on the historic Talbot Square in Paddington will serve students of London’s 39 universities, which include four of the world’s top 100 higher education institutions. The asset is within walking distance of major transport links including the new Elizabeth Line.
Cohort underwrote, agreed and closed the transaction in just 11 days, demonstrating the boutique lender’s ability to move quickly, offer flexible terms, and understand specialist areas of the property market – a major advantage given the current market volatility.
The deal also shows both parties’ conviction that student accommodation is an asset class that will continue to perform well in the capital. Only 36% of London’s 340,000 students have access to dedicated student accommodation, which represents a student-to-bed ratio of 3.44 – far higher than the UK average of 2.5.
The large, centrally located development will continue to benefit from supply-side restrictions, particularly as the New Draft London Plan requires developers of new PBSA assets to gain explicit support from universities and designate 35% of rooms as affordable.
Cohort Capital aims to fill a gap in the debt market by fitting between the traditional bridging lenders backed by large funding houses, and institutional players whose size and minimum ticket sizes prevent them from moving quickly. Cohort’s boutique size and expertise in property allows the new lender to move much faster and offer more flexible terms than its competitors.
Bal Sohal, chairman of Cohort Capital, said: “The fact we closed a £70m loan in such a short period of time is testament to how Cohort operates and delivers. With the current volatility and headwinds faced in the market, we strongly believe a flexible, quick and private debt partner goes a long way. While many investors continue to spectate from the side-lines since Covid-19, Cohort is perfectly placed to carefully deploy capital into sensible private credit transactions – opportunities we feel are still underserved by flexible and experienced private capital.”
Matt Thame, founder of Cohort Capital, added: “Throughout the UK, new students continue to outstrip local accommodation supply. Students in the regional areas of the UK, and more so in central London, have been turning to traditional private rentals or renting further afield and accepting the longer commute to campus. The undersupply of stock and growth in student numbers make this latest deal an attractive acquisition facility that we were delighted to provide.”
