Purpose Built Student Acommodation Finance
We are a specialist broker in securing purpose built student accommodation finance. From application to completion we give investors access to specialist lenders in order to secure market leading funding for both development finance and commercial term exit finance
PBSA Funding Solutions
Funding available for both direct lets and nomination agreements
Preferred terms for Russell Group locations
Standard construction and modular propositions welcome
Development finance at 90% Loan to Cost (LTC)
90% LTC stretched senior debt funding / 75% Loan to Gross Development Value (LTGDV) (lower there of); keeping the transaction a pure debt proposition, rather than give away equity/profit share
Mezzanine finance up to 75% LTGDV
Hybrid mezzanine/equity finance for higher LTC's
Joint venture/equity to sit on top of senior debt
Commercial term exit lending for completed schemes
No maximum loan
An Attractive Proposition
Due to the excellent international reputation of the UK higher education sector, purpose built student accommodation (PBSA) has remained an attractive proposition for investors and developers in recent years. A variety of products are offered by lenders on a case by case basis.
With specialised lenders offering a variety of products on this asset class we can offer you access to the best funding solution for your particular project. We have extensive experience and detailed knowledge of lenders' specific requirements, ensuring a smooth process from application to completion. You can read more on lenders' criteria here
Cost Effective Solutions
Getting the right funding solution goes beyond just securing a great rate. Through a detailed understanding of your project, it's structure and the specific timescales we will be able to advise on the most cost effective solution.
MontpelierPF prides itself in being at the forefront of the PBSA debt finance market. In light of the stretched senior market all but disappearing overnight when Covid19 hit, we had been working closely with senior and mezz lenders, so as to ensure we can still look to achieve the gearing that was being achieved back in 2019. 90% loan to cost, equating to just over £20m, for a consented PBSA studio scheme in Edinburgh,
PBSA Development at 90% LTC
PBSA Bridging at 103% loan to contract purchase price
Our seasoned developer client had exchanged contracts for a consented Purpose Built Student Accommodation scheme (PBSA) for a nominal consideration, with a long-stop completion. The developer utilised the 9mths between exchange and completion to improve the existing internal configuration through a Section 73 agreement, thus enabling an additional 27 beds. This uplift in the number of beds achieved an increase on the Residual Land Value of £1.5m, even before our client had completed on the acquisition.
The developer, who typically acquires half a dozen sites a year, needed to commit as little of his own funds as possible to enable completion, whilst ensuring he retains a healthy cashflow.
Facility Provided: We secured bridging finance; leveraged against the uplifted Residual Land Value for this purchase, rather than against the contract purchase price. Ultimately achieving a gross advance of 103% loan to contract purchase price / 94% net. Pricing was at 1% per month, with a 2% lender facility fee and no exit fee, over a 9 month term
PBSA Finance Explained
Want to learn more about PBSA finance?
If you are new to PBSA finance and want learn more about how to procure finance visit our 'PBSA Finance Explained' page. Areas covered include:
Why PBSA is so popular
The factors to consider when obtaining funding
The types of funding available