Alternative asset manager Cheyne Capital has announced it has provided a £46.5m senior development loan to finance a large purpose-built student accommodation (PBSA) development in Brighton. The investment comes from the latest vintage of Cheyne Capital’s CRECH programme, the firm’s real estate direct lending strategy, which launched in 2011.
The new Student Roost development on Moulsecoomb Way is in a prime location in Brighton close to both universities. Named Hillfort House, the PBSA scheme will include 380 student beds and nearly 14,000 sq ft of ancillary commercial space. Construction of the development is well progressed and forecast to open ahead of the 2022/23 academic year.
“This is precisely the kind of investment that Cheyne likes to pursue. We seek to work with experienced sponsors with extensive track records, with whom we can build long-term partnerships – and that’s what we have with Student Roost.
“Moreover, we look to identify senior lending opportunities in value-add or development assets in attractive locations at defensive loan-to-values. Student accommodation is a sector that we think is very promising – particularly in places like Brighton where the supply of quality purpose-built student accommodation has not kept up with growing student demand”.Richard Howe, Cheyne Real Estate
Hillfort House is being developed by McLaren Property – who have delivered a number of successful projects within the City of Brighton. The new property is being constructed by HG Construction to high ESG standards, providing several environmentally positive initiatives, including cycle storage facilities, motion-controlled lighting sensors and EV charging points, as well as constructing a community unit.
The Sponsor, Student Roost, will own and operate the completed scheme. An award-winning PBSA provider in the UK market, Student Roost has a portfolio of approximately 20,000 operational beds under management.
“We’re pleased to reach this important milestone of our first investment in Brighton, Hillfort House. Despite the strong resilience of the PBSA sector and the continued strong reputation of UK universities, the disruption to higher education as a result of the pandemic has meant that the debt markets have been challenging to navigate over the last 12 months.
“However, Cheyne provided a really compelling structure for us on this deal which we’re very happy to get over the line.”Stephen Rigby, Chief Investment Officer, Student Roost