UK: Abu Dhabi Islamic Bank (ADIB) has provided Hallmark Estates with a new finance facility to refinance The Stay Club North Acton, a 270-unit coliving scheme located in west London.
The property has a 100 per cent occupancy rate, “illustrating the robust tenant demand and limited supply in the residential market”. It has an EPC rating of “A” and features amenities including a gym, laundry facilities and concierge services.
This deal marks the second phase of the project with ADIB financing the initial phase, comprising 343 units in June 2023.
Paul Maisfield, UK chief country officer at ADIB, said: “Despite challenging market conditions, we continue to offer selective Islamic structured financing solutions to our clients, facilitating both refinancing and new acquisitions. These achievements occur amidst a challenging UK commercial real estate market, which has seen significant correction in capital values over the last 18 months due to a higher rate environment, impacting investment activity.”
He added: “There is a strong emphasis on the sustainability and growth prospects of rental income, to drive returns and service debt. Consequently, rigorous due diligence on asset quality, ESG credentials, and sub-sector supply and demand dynamics is paramount. We have observed strong investor demand for the living sectors, particularly high-quality purpose-built student accommodation, build-to-rent and coliving assets, which score favourably on the above criteria fuelling robust rental income growth.”
ADIB has closed senior financing transactions of more than AED 3.5 billion (£750 million) in the last five years. The bank’s London-based team offers financing support and advisory services for GCC clients looking for commercial and residential property investments across the UK.
Recent deals closed by ADIB in the living sector include structured financing a 300-unit PBSA building in Kingston upon Thames, a 90-unit PBSA building in Manchester and a portfolio of residential assets in Manchester comprising more than 160 apartments.
Another coliving asset in North Acton, The Castle, is being forward funded by Outpost Management and BlackRock Private Markets.
