Select Property Group, the Manchester-based developer, retailer and operator of property brands, has today announced that it has secured £169millon credit facilities to fund the growth of its award winning student accommodation brand, Vita Student.
The 5 year finance facilities have been secured through Lloyds Bank, Wells Fargo, and PGIM Real Estate and will enable Vita Student to expand into new cities with a build to hold strategy, replacing the Group’s previous strategy of retailing individual buildings to investors. The facilities are split between a £108 million senior development and investment finance facility, provided by Lloyds Bank and Wells Fargo (50:50), and a £61 million junior facility, provided by PGIM Real Estate.
KPMG were the financial advisor for Select.
Commenting, Mark Stott, CEO Select Property Group: “Vita Student currently operates ten buildings across eight cities but with high demand for our product we want to be represented in more university cities. Successfully securing this credit allows us to do that quickly, while crucially allowing us to retain the assets.”
Jonathan Monnickendam, Director, Developers, Lloyds Bank Commercial Real Estate, commented: “We are pleased to be able to help support Select’s growth ambitions and, in turn, create new jobs and investment in more UK cities. Working closely with the management team and their advisors, we were at the forefront of developing a new type of funding model for the business that gives it both the firepower and agility it needs.”
Richard Craddock, Director, Wells Fargo, said: “We are delighted to be supporting Select Property Group in the next phase of their Vita Student business, which has shown itself to be one of the market leading platforms in the sector. We look forward to working with them on these projects.”
Commenting, Andrew Macland, Head of UK at PGIM Real Estate: “Through PGIM Real Estate’s lending platform we are very pleased to support the growth ambitions of Select Property Groups Vita Student developments. Our innovative funding solution allows this expansion across the UK and Europe”.
Simon Mower, Lead of Real Estate Debt Advisory at KPMG, added:
“This significant financing arrangement will provide Select with the capacity and market access to match its significant growth ambitions. Securing such a facility not only shows the strength of the company’s business strategy and brand, but is also an indicator of high levels of investor interest and confidence in the UK student accommodation sector.”
Select was advised by Pinsent Masons (property and banking) and by Weightmans (construction). Lloyds and Wells Fargo were advised by Berwin Leighton Paisner. PGIM Real Estate were advised by Taylor Wessing (property and banking) and Addleshaw Goddard (construction).