Lloyds extends loan on Valad’s student accommodation fund

Lloyds has extended the loan held against the Valad Europe’s University Capital Trust.

The bank has provided a £42m facility held against the five-asset vehicle, which reflects a loan-to-value of 43%. The previous £37m loan secured against the portfolio was due to expire at the end of last year and has been extended by two years.

The properties are based in London, Newcastle, Nottingham, Sheffield and Lincoln and each provide between 200 and 400 beds.

Over the last couple of years, the student accommodation sector has become increasingly attractive for investors looking to diversify their portfolios away from the core pillars of the real estate sector – offices, retail and industrial – and lenders are equally keen to finance their activities.

Fraser Kennedy, chief financial officer at Valad Europe, said: “There continues to be strong demand for good quality, well-located student accommodation in the major UK university towns and cities. Having run a competitive process, with interest from a number of lenders, we decided to refinance UCT with the fund’s current lender, Lloyds Bank.”

Madeleine McDougall, head of institutional real estate clients at Lloyds, added: “Given UCT’s consistently robust return performance, we are delighted to continue our support for the fund and this asset class, by extending and increasing this facility.”

Valad Europe, headed by Martyn McCarthy (pictured) was bought by listed Australian investment and fund management group Cromwell Property Group in January. It manages €5.3bn of real estate assets and investment capacity across its 24 funds and mandates.