Investec Real Estate has announced a £15.6m loan to Moorfield Group, a UK-focused real estate fund manager, for the development of a 293-bed purpose-built student accommodation (PBSA) in Lincoln.
This project, situated near Lincoln’s city centre and set to be completed before the 2024/25 academic year, includes townhouses and multi-storey buildings with facilities like an on-site reception and laundry.
Investor sentiment in the PBSA sector remains positive, driven by a significant shortfall in available accommodation. With an estimated 95,000 new beds in the planning stages, this is starkly contrasted by the expected increase of 263,000 full-time undergraduates by 2030. This supply-demand gap is projected to support an annual rental growth of 5%.
This sentiment is reflected in Investec’s third Future Living report, which highlighted the PBSA sector as having the most considerable increase in investor appeal over the past two years.
Since 2011, Investec has reached over £1bn in student accommodation sector lending, supporting 22,000 beds across 55 schemes in 23 UK cities. The current loan to Moorfield for the Lincoln development marks their second collaboration, following an earlier £18.97m loan for a 282-bed PBSA project in Colchester.
Jonathan Long, head of corporate lending at Investec Real Estate, remarked: “With UCAS expecting to receive one million applications annually by 2030, we remain bullish on the student accommodation sector’s compelling long-term outlook.
“It has an attractive, inflation-protected income profile supported by deep-rooted demographic tailwinds.
“Our 13-year track record providing a mix of domestic and international capital with a range of funding solutions means we are well placed to capitalise on the continued demand for new development.
“Working with repeat borrowers is central to our longevity – in particular with businesses like Moorfield, who deliver high-quality specialist schemes that are key to supporting the UK’s growing student numbers.”
Charles Ferguson Davie, chief investment officer at Moorfield Group, added: “We have been investing in student housing for over twenty years and investor confidence in the sector remains resilient, with domestic and international investors keen to increase their exposure to an undersupplied asset class offering risk-adjusted returns and long-term income streams.
“We see a market opportunity in new-build development and refurbishment of existing stock, with both strategies responding to investor demand for high-quality assets with leading ESG credentials.”
