Challenger bank OakNorth has written a £17.5 million (€20 million) refinancing package to UK developer Ankor Property Group to back two student accommodation buildings in London.
In its first foray into student accommodation, OakNorth has provided a five-year loan, priced at 4.5 percent plus Libor. The debt facility’s loan-to-value ratio is 65 percent.
The loan will be used to provide Ankor with an extended marketing period for the purpose-built blocks in Ealing and Greenwich, consisting of 111 studios in total. Both developments are part of Ankor’s ‘Cube’ portfolio, which includes a mixed-use scheme in central Reading, consisting of three restaurants and 33 flats.
The debt facility backs Ankor as the firm pursues “ambitious growth plans”, said Deepesh Thakrar, senior director of debt finance at OakNorth.
Ankor is planning to expand its portfolio of three assets to 12 by the end of 2020, focusing on student housing, aparthotels and the private rented sector. This two-year growth plan will include a £100 million joint venture with Chinese investors as well as a possible initial public offering.
“With real estate in the UK becoming increasingly expensive, diversification and sourcing different opportunities are essential,” said Nori Touati, managing director and founder of Ankor.
“Demand for student accommodation remains high in London – it’s the world’s largest student market, with more than 300,000 full-time students, four universities in the top 50 and a quarter of all international students studying in the capital,” Thakrar said.