Balfour Beatty, the international infrastructure group, announces that it has raised development finance with Investec Bank for the Kennedy Street, Glasgow Student Accommodation Project. This is Balfour Beatty’s first project for the direct let market as a developer of student accommodation. Balfour Beatty’s developer role includes site purchase, planning, design, construction and operation of the scheme, together with direct letting of the rooms and student management elements.
The student accommodation development on the east side of Glasgow will include high quality indoor and outdoor amenity spaces for students and a retail unit fronting Kennedy Street. It will feature 536 bedrooms, split over two blocks around a central courtyard containing 149 self-contained studios and 387 bedrooms in cluster flats. Construction work on the new residences commenced in November 2015 and the works are progressing well, with project completion on target for July 2017.
The facility was agreed with Investec Bank’s Structured Property Finance team which has specialist knowledge of the student accommodation market as well as residential, mixed-use and commercial property , offering senior/stretched senior debt, and equity solutions to clients.
Ian Woosey, Investment Director for the student accommodation sector, Balfour Beatty Investments said;
“As one of the leading developer/contractors in the student accommodation market, we are delighted to have arranged the optimum funding package to carry out this development in Glasgow. From our wide ranging experience of working in this sector, we believe there is a good demand for high quality, purpose built cluster flats and studios in this part of Glasgow. The residences will be marketed direct to students later in the year and will be available for the September 2017 student intake.”
Mark Bladon at Investec Structured Property Finance added;
“It is very rewarding to be supporting Balfour Beatty in this exciting new venture given it is the first time they are developing and directly letting a student block. We were attracted to work with Balfour Beatty given their size, profile and track record as a contractor. Notwithstanding signs of yield compression, we still like the student accommodation market and our appetite remains strong to provide stretched senior development finance for the right deals such as this.”