UK: Alternative property lender Cohort Capital has funded a £70 million facility for the acquisition of Lillian Penson Hall, a 100,000 square foot PBSA development in London.
The buyer is LPH Paddington Ltd, a company majority-owned by Union Property Developments Ltd.
The 313-unit eight-storey building on Talbot Square in Paddington will serve students of London’s 39 universities, which include four of the world’s top 100 higher education institutions. The asset is within walking distance of major transport links including the new Elizabeth Line.
Cohort Capital says it aims to fill a gap in the debt market by fitting between the traditional bridging lenders backed by large funding houses, and institutional players whose size and minimum ticket sizes prevent them from moving quickly.
It underwrote, agreed and closed the transaction in 11 days. Bal Sohal, chairman of Cohort Capital, said: “The fact we closed a £70 million loan in such a short period of time is testament to how Cohort operates and delivers. With the current volatility and headwinds faced in the market, we strongly believe a flexible, quick and private debt partner goes a long way. While many investors continue to spectate from the side-lines since Covid-19, Cohort is perfectly placed to carefully deploy capital into sensible private credit transactions – opportunities we feel are still underserved by flexible and experienced private capital.”
Matt Thame, founder of Cohort Capital, added: “Throughout the UK, new students continue to outstrip local accommodation supply. Students in the regional areas of the UK, and more so in central London, have been turning to traditional private rentals or renting further afield and accepting the longer commute to campus. The undersupply of stock and growth in student numbers make this latest deal an attractive acquisition facility that we were delighted to provide.”
Just 36 per cent of London’s 340,000 students have access to dedicated student accommodation, which represents a student-to-bed ratio of 3.44 – far higher than the UK average of 2.5. The New Draft London Plan requires developers of new PBSA assets to gain explicit support from universities and designate 35 per cent of rooms as affordable.
