UK: Avamore Capital, a private property lender focused on bridging and development loans, has announced its entry into the PBSA market in the UK.
The move marks the company’s first move beyond its core target real estate market, namely residential accommodation in the UK.
The lender says that it is focusing on prioritising affordability for students and it is seeking to address a chronic supply and demand imbalance that has led to a disproportionate student-to-bed ratio in the country.
Over the past eight years, Avamore Capital has lent more than £600 million to projects that span its four key products – development, refurbishment, part-complete development and bridging. Its largest transaction to date is a part-built scheme in Newbury in Berkshire, worth £13.3 million.
Philip Gould, chief lending officer at Avamore Capital, said: “Going forward, the forecast slowdown in planning and delivery of new beds, combined with rising student numbers, means the broad macro trend is favourable for developers and investors. The issues around affordability make it clear there is a growing requirement for small-scale, low-amenity student housing targeted at domestic and price-sensitive international students.
“We have determined that this requirement can be serviced by the refurbishment of existing first-generation PBSA stock and the repurposing and retrofitting of existing office / commercial stock, which fits extremely well with our extensive experience in heavy residential refurbishments and office-to-resi PD conversions.
“We look forward to increasing our presence in the student accommodation sector and have ambitious plans to further improve how we can help developers through continued product innovation to give our brokers and borrowers the support they need,” he added.
