Cheyne Capital provides senior loan for Brighton PBSA development

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Alternative asset manager Cheyne Capital Management (UK) LLP (Cheyne Capital) has provided a GBGP46.5 million senior development loan to finance a large purpose-built student accommodation (PBSA) development in Brighton, England.

The new Student Roost development on Moulsecoomb Way, which will be named Hillfort House, will consist of 380 beds, as well as close to 14,000 sq ft of ancillary commercial space, in a prime location in Brighton close to both universities. Hillfort House is being developed by McLaren Property, who have delivered a number of successful projects within the City of Brighton. The new property is being constructed by HG Construction to high ESG standards, providing several environmentally positive initiatives, including cycle storage facilities, motion-controlled lighting sensors and EV charging points, as well as constructing a community unit.
The Sponsor, Student Roost, will own and operate the completed scheme. Student Roost is an award-winning PBSA provider in the UK market with a portfolio of approximately 20,000 operational beds under management. In addition, McLaren and HG Construction are also highly experienced with an established track record of delivering successful schemes. Construction of Hillfort House is well progressed and forecast to open ahead of the 2022/23 academic year.
Richard Howe of Cheyne Real Estate says: “This is precisely the kind of investment that Cheyne likes to pursue. We seek to work with experienced sponsors with extensive track records, with whom we can build long-term partnerships – and that’s what we have with Student Roost. Moreover, we look to identify senior lending opportunities in value-add or development assets in attractive locations at defensive loan-to-values. Student accommodation is a sector that we think is very promising – particularly in places like Brighton where the supply of quality purpose-built student accommodation has not kept up with growing student demand”.
Stephen Rigby, Chief Investment Officer at Student Roost, says: “We’re pleased to reach this important milestone of our first investment in Brighton, Hillfort House. Despite the strong resilience of the PBSA sector and the continued strong reputation of UK universities, the disruption to higher education as a result of the pandemic has meant that the debt markets have been challenging to navigate over the last 12 months.

“However, Cheyne provided a really compelling structure for us on this deal which we’re very happy to get over the line.”
The investment comes from the latest vintage of Cheyne’s CRECH programme, the firm’s real estate direct lending strategy, which launched in 2011.