Apollo backs Cain with £250m PBSA loan

The loan will support the delivery of 2,389 student accommodation beds in the UK.

New York-based investment management firm Apollo Global Management has provided a £250 million (€289 million) loan facility to private real estate company Cain International to support the delivery of five purpose-built student accommodation schemes in the UK.

A source close to the deal told Real Estate Capital Europe part of the loan supported the acquisition of five sites from UK developers Fusion Group and Olympian Homes. The remainder of the loan will support the development of the projects. The loan represents the first time Apollo has provided debt to Cain.

Last week, Cain announced it had completed a £500 million PBSA forward-funding deal that will support the delivery of 2,389 beds across major UK university cities. Planning consent has already been secured for all five schemes, it added.

With this transaction, Cain also received equity backing from Israeli insurance group Menora Mivtachim Group – marking Menora’s first direct investment into a UK PBSA strategy. Cain will work alongside Fusion and Olympian to deliver the schemes.

Apollo’s global real estate debt team, which was launched in 2009 in the US, focuses on providing senior, whole and mezzanine loans secured against commercial real estate. It aims to provide acquisition and development financing globally. The team’s loan book currently stands at around $40 billion in the US and around $11 billion within Europe.

The firm typically aims to lend between $3 billion to $4 billion per year mainly through its own balance sheet – supported by the firm’s insurance business.

The source said the deal was closed within six months, adding this is relatively short in comparison to most large deals currently – which can take as much as double that amount of time – due to the market uncertainty.

The fact Apollo is able to lend from its group balance sheet resources, the source added, means Cain will only deal with Apollo throughout the term of the facility, in comparison to other alternative lenders which may need to syndicate a loan of such scale.

The Cain projects    

With the sites acquired from Olympian, Cain will deliver two new PBSA schemes in Leeds and York. In Leeds, the 45-storey Cirrus Point will provide 660 beds across 255,000 square feet, which the firm believes will make it the tallest PBSA building in the world and the tallest building in Leeds. The scheme is due for completion in 2026. In York, in time for the 2025-26 academic year, Rialto House will provide 275 beds within proximity of the University of York.

With Fusion, Cain will be delivering a further three schemes in Liverpool, Nottingham and Manchester. In Liverpool, 420 beds in time for the 2025/26 academic year; In Nottingham, a nine-storey asset in multiple connected blocks, consisting of 552 student rooms due to complete in Q3 2025; and in Manchester, 509 student beds in a 28-storey building in time for the 2026/27 academic year.