PIC invests into new PBSA for LSE

PIC invests into new purpose-built student accommodation for the London School of Economics and Political Science (LSE).

London School of Economics and Political Science from LSE Square | PBSA News
London School of Economics and Political Science from LSE Square. Image credit: Umezo KAMATA, CC BY-SA 3.0 via Wikimedia Commons.

Specialist insurer of defined benefit pension funds – Pension Insurance Corporation (PIC) – announces it has invested £129m with the London School of Economics and Political Science (LSE) to fund the development of a purpose-built student accommodation (PBSA) scheme in London. The LSE is one of the world’s leading social sciences universities, ranking first in Europe and second in the world – and is a member of the Russell Group.

The transaction includes a long-dated, inflation linked loan, maturing in 2069 and investment is tailored to match PIC’s pension payments in years when public debt is scarce. The deal uses a deferred drawdown structure, with the funding provided through five tranches during the construction period.

“One of the priorities in LSE’s 2030 strategy is to Develop the LSE for Everyone. For Residential Services this means guaranteeing an offer of accommodation to all first-year students. The Glengall Road development takes us a significant step towards that goal by providing 676 affordable rooms for our graduate students.”

Ian Spencer, LSE Director of Residential Services

Located on Glengall Road, Southwark, the newly constructed 676 bed PBSA scheme will provide additional housing primarily for postgraduate students of the LSE. It will comprise a 15-storey hall of residence, and amenities include a gym, cinema, communal spaces, three roof terraces and two courtyard gardens. The scheme is expected to complete in 2024.

Rooms will be marketed at a discount to other options in the LSE’s residential portfolio – and over a third will specifically benefit from the London Plan’s affordable student housing requirements, enabling access to good quality housing for lower income students.

“The need for more quality, affordable student accommodation in London couldn’t be greater. The LSE is a highly attractive institution for students from around the world and has ambitious plans for growth. We are delighted to support these plans by providing investment in much needed new halls of residence for postgraduate students. By investing in assets that serve the next generation, PIC can secure the pensions of its policyholders.”

Thomas Foucoin, Debt Origination Manager, PIC

The new development is sponsored by DIF Capital Partners. Engie Regeneration – a subsidiary of Equans, a global contractor in the utility, industry and infrastructure sectors will complete the design, build, operations and maintenance. LSE will be responsible for pastoral support, reception and allocations.

“DIF is excited to be growing its portfolio in the student accommodation sector. We look forward to partnering with a world-class university and to support it with its student accommodation delivery.”

Gijs Voskuyl, Partner and Head of Investments, DIF Capital Partners