Investec funds £55m loan for Scape Group’s Walthamstow development

Investec Real Estate has arranged a £55m loan for Scape Group to develop a co-living scheme in Walthamstow, London. This is Investec’s third facility in the co-living sector, driven by trends like home ownership unaffordability and hybrid working patterns.

Scape Group will construct a 321-bed co-living scheme at 1 Blackhorse Lane, East London, under their Morro brand. The project, set to complete in 2025, aims for an EPC A rating and BREEAM ‘Excellent’ certification. It will feature shared residential spaces, a public café, a retail unit, and a music and comedy venue, benefiting from excellent transport links via Blackhorse Road station.

Investec previously supported a joint venture between Scape Group and HG Construction with a £53.5m senior debt facility in 2021 for a similar project in Guildford.

Scape Group, one of the largest PBSA and Living developers in the UK and Ireland, operates 4,200 beds with 2,700 more in development.

Hollie Sleigh at Investec Real Estate said: “With demand for high quality, well-connected rental accommodation in London continuing to outstrip supply, the appeal of co-living as an asset class to both investors and residents is pushing this nascent sector further into the mainstream.

“Our most recent Future Living report echoed this sentiment by highlighting the positive outlook for and expected investment activity into co-living.

“This Blackhorse Lane transaction is an exciting expansion of our exposure to the co-living space, which we believe is very underinvested, and will enable Scape Group to grow and enhance its portfolio.

“This is our sixth loan with Scape Group, whose track record in sourcing and delivering highly desirable and extremely well managed PBSA and living assets speaks for itself. We look forward to seeing the development progress and continuing to work together.”

Adam Brockley, founder and chief development officer at Scape Group, added: “We’re thrilled to be partnering with Investec who have a fantastic record of consistently delivering funding for Scape Group, particularly during challenging times.

“With our growing pipeline of Morro and Scape PBSA developments we look forward to continuing our well-established relationships with both Investec and APG.

“Our growth strategy remains as ambitious as ever – we’re actively seeking new opportunities in the PBSA and living spaces.”

Charles Moran, planning director at Scape Group, concluded: “We’re excited to bring this scheme forwards and open our first Morro building in central London.

“We’ve had incredible support from Waltham Forest council who have seen the value in our proposition for their growing community.

“Morro is ideally suited to this diverse, rapidly changing neighbourhood and presents us with many fantastic opportunities for collaboration with the many artists and makers in the local area.”