Developer lands £169m funding facility

SELECT Property Group, the Manchester-based developer, retailer and operator of property brands, has secured £169m credit facilities to fund the growth of its award-winning student accommodation brand Vita Student.

The five-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 £108m senior development and investment finance facility, provided by Lloyds Bank and Wells Fargo (50:50), and a £61m junior facility, provided by PGIM Real Estate. 

KPMG was the financial adviser for Select.

Mark Stott, chief executive for Select, said: “Vita Student currently operates  10 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, said: “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.”

Andrew Macland, head of UK at PGIM Real Estate added: “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.”

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).

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