Landmark Central London scheme secures £125million of development finance

Urbanest, a developer and operator of student accommodation, has agreed a £125 million development financing facility with M&G Investments to finance a landmark student-led mixed-use development scheme in the City of London. The deal enables the development of over 650 student beds, to be offered exclusively to students from King’s College London (‘KCL’) through a long-term nominations agreement.

In one of the largest deals of its kind this year, M&G will fund the construction of Urbanest’s Aldgate scheme, to be known as UrbanestCity. In addition to 654 student beds, the scheme will provide 60,000 sq. ft of Grade-A office accommodation, along with an incubator space for entrepreneurial start-up businesses through a lease to King’s College Entrepreneurship Institute. The building will target a BREEAM “Excellent” rating upon scheduled completion in 2021.

The £125 million loan will mature in 2023 and will convert from a development to investment finance facility once construction is complete. The construction has been procured under a contract with Balfour Beatty, Urbanest’s long-standing development partner.

Concealed beneath the Aldgate development are the remains of a bastion tower and part of the 4th century wall that once encircled the Roman City of Londinium. Urbanest is working with Museum of London to incorporate these incredible archaeological remains into the project, which consolidates two former office buildings (Emperor House and Roman Wall House) acquired by Urbanest in early 2017.

The spectacular Roman remains are set to be made readily accessible to the public for the first time within a three-storey gallery and museum, that will feature a subterranean public viewing platform, café and exhibition space to display finds from the original archaeological excavations of the site in the late 1970s and early 1980s. The ancient remains and the space that they have inspired will place the Roman wall at the heart of the scheme and provide an exciting museum space for student residents and Londoners to enjoy.

Vicky Skinner, CFO at Urbanest, said:

“This is Urbanest’s most ambitious student-led mixed-use development to date, providing a unique blend of student housing, heritage, entrepreneurial innovation, commerce and leisure space uses which will sit alongside and complement each other in the completed scheme. We are delighted to be working with M&G and KCL again and our aspiration with Urbanest City is to add another landmark location within our expanding PBSA portfolio.”

Adam Willis, Associate Director in M&G’s Real Estate Finance team, said:

“Urbanest continues to provide fantastic facilities for students in London and we are delighted to expand our relationship and enable the construction of this exciting development. We continue to see increasing demand for student accommodation in the capital and this deal provides our institutional investors with access to attractive returns secured against high quality real estate in London’s city centre.

Paloma Lisboa, director of Student Residences at King’s College London, said:

“We have enjoyed a longstanding relationship with Urbanest, and they are renowned for their focus on resident service and a market-leading operational platform. This Nominations Agreement enables us proprietary access to the rooms we need without having to build them ourselves; so that our students can enjoy a wide range of high-quality, Urbanest-owned rooms at a broad range of price-points. This new scheme brings together an exciting blend of history and innovation; creating an ‘incubator’ space for start-ups alongside vital new student housing. We are delighted to be working closely with Urbanest.”

Urbanest was advised by CMS Cameron McKenna Nabarro Olswang LLP, Bedell Cristin, Apt (formerly known as Robin Partington & Partners), CBRE Ltd. and Pollitt & Partners. M&G was advised by Linklaters LLP, JLL and WSP.