UPP sources £105m financing for London student development

UK student accommodation provider University Partnerships Programme (UPP) has closed a £104.7 million financing of a student housing development for the University of London.

The financing includes £86.8 million of long-term senior debt, provided by Pension Insurance Corporation (PIC), an insurer of defined benefit pension funds. The index-linked loan has a term of 46 years, UPP said.

The firm added that UPP Group and its shareholders have provided £17.9 million of subordinated debt and equity.

The financing will fund the development of Duncan House in Stratford, east London. The 33-storey building will provide more than 18,000 square metres of accommodation and will involve UPP operating 511 new study bedrooms and communal space for the length of its concession.

UPP has previous developed the £140.7 million Garden Halls scheme in London’s Bloomsbury for the University of London, which opened to students in September 2016. PIC provided the senior tranche of bond debt in the Garden Halls scheme.

“As PIC insures increasing amounts of defined benefit pension liabilities, partnerships such as we have with UPP ensure that we are able to invest in strong, secure, long-term cash flows to match our pension payments,” said Allen Twyning, head of debt origination at PIC.