Alternative property lender Cohort Capital has funded a £70m facility for the acquisition of Lillian Penson Hall, a 100,000 sq ft purpose-built student accommodation (PBSA) development in central London. Cohort Capital underwrote, agreed, and closed the transaction within 11 days. The buyer is LPH Paddington Ltd, a company majority owned by Union Property Developments Ltd.
The 313-unit, eight-storey building on the historic Talbot Square in Paddington will serve students of London’s 39 universities, which include four of the world’s top 100 higher education institutions. Lillian Penson Hall is within walking distance of transport links, including the new Elizabeth Line.
The Lillian Penson Hall development is expected to perform well in the capital, as only 36% of London’s 340,000 students have access to dedicated student accommodation, which represents a student-to-bed ratio of 3.44, which is higher than the UK average of 2.5.
“The fact we closed a £70m 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.”Bal Sohal, Chairman, Cohort Capital
The Lillian Penson Hall development is centrally located and will be subject to supply-side restrictions – such as the New Draft London Plan. This requires developers of new PBSA assets to gain explicit support from universities and designate 35% of rooms as affordable.
Cohort Capital 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 can prevent them from moving quickly. Cohort Capital intends to offer more flexible terms than its competitors and help the new lender to move faster.
“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.”Matt Thame, Founder, Cohort Capital