Downing Property Finance has completed three purpose-built student accommodation (PBSA) development loans totalling approximately £47.5m across Glasgow, Bristol, and Manchester, as the specialist lender continues its focus on the student housing sector.
The largest transaction is a £25m development loan for a new city centre scheme in Bristol. The funding structure was designed to accommodate the Gateway 2 approval pathway required under the Building Safety Act, reflecting the increased regulatory complexity for larger residential developments.
In Glasgow, Downing has provided a £12m development loan for a city centre conversion that will deliver beds for postgraduate students at the University of Glasgow. The transaction marks Downing as one of a limited number of lenders operating on equivalent terms in both Scotland and England.
The Manchester deal comprises a £10.5m loan structured to cover approximately 95% of total development costs. The scheme will deliver 76 studio apartments, scheduled for completion ahead of the September 2027 university intake, with an anticipated gross development value of around £20m.
Market context
Will Powell, investment director at Downing, said: “Downing remains committed to the PBSA sector, which, despite some recent slowdown, continues to perform as an asset class in the core university cities. Our focus remains on backing good quality sponsors on well-structured business plans, and I was delighted to close these transactions within April so that construction can commence in earnest.”
The deals come as the UK property market faces broader challenges, with recent data showing a quarter of property sellers withdrawing from the market, highlighting the contrast between specialist sectors like student accommodation and the wider residential market.
John Pollington, also an investment director at Downing, added: “We’re proud to support PBSA developers with a broad, flexible range of funding solutions, considering the client’s goals through every step of a process designed to be straightforward. We look forward to continuing to work with experienced partners to help bring high-quality schemes forward.”
The completion of all three transactions within April allows developers to commence construction programmes ahead of the traditional summer building season. The deals reflect continued lender appetite for student accommodation despite wider concerns about challenges in the broader residential property market.