Back on course: lenders look set for a return to
student sector in autumn
of PBSA loans have been made in the past month, including Investec’s £17.5m
senior loan to PBSA provider Scape for a scheme in Bloomsbury, London.
week, new student accommodation lending platform Kinetic Capital was launched
with an initial commitment of £100m. It will offer a range of finance,
including whole loans, mezzanine debt and bridging finance.
UNIVA,Turkey’s largest PBSA provider, invested £10m in the acquisition of 140
flats in UK PBSA operator Opto Living’s new Cardiff PBSA scheme.
adviser Brotherton Real Estate said that while loan-to-value ratios
had fallen across the market and deals were taking longer to get done, deals
could still be funded on standing student assets.
said more lenders were structuring deals with interest reserve accounts, where
lenders block 12 months’ interest in a charge account, to mitigate nervousness
managing director at Brotherton, said: “A number of senior lenders seem to be
waiting for September to confirm that bookings and reservations materialise
into students turning up for the next academic year. We expect that in
September, when students hopefully return, more lenders will return to the
Clarke, relationship director at Investec Structured Finance, said: “Anecdotal
feedback is that lettings [for the 2020-21 academic year] are about 10% to 20%
below where they were last year. For a lot of people, the target is 80% to 85%
that PBSA will benefit from the counter-cyclical nature of student demand.
Higher Education Statistics Agency figures show higher education enrolment
increased notably in the past financial crash, partly because employment
also counteract the inevitable fall in the number of students travelling to
study in the UK from overseas due to travel restrictions. “The job market isn’t
looking brilliant,” said Clarke. “The thinking now is that while there won’t be
as many international students this academic year, that drop will potentially
be offset by an increase in local students.”
shows there are more applicants holding a firm offer to start a course this
autumn than at the equivalent point last year.
97% of universities plan to provide in-person teaching in the autumn term,
according to the Universities UK survey published on 17 June.