Downing LLP and Pollen Street Capital announce £24m deal for student accommodation development

Investment managers Downing LLP and Pollen Street Capital are pleased to announce a £24.3 million co-funded deal, following the recently launched real estate funding partnership between the two businesses.

Downing LLP and alternative investment manager Pollen Street Capital have committed £24.3 million of development funding towards the construction of two purpose-built student apartment blocks in Canterbury, which will provide best in class accommodation and facilities for just under 400 students.

In December 2020, Downing LLP and Pollen Street Capital first unveiled their new real estate funding partnership, which aims to co-fund development finance and bridging deals for high-quality SME developers. Downing LLP currently has £470m of AUM in property-backed deals made by its experienced Development Capital and Property Finance teams. Pollen Street Capital, a private equity and credit focused manager, has invested over £1.1 billion in senior real estate debt during the past four years through its partnership model with property lenders.

Tackling the undersupply of purpose-built student accommodation

Parik Chandra, Partner and Head of Property Finance at Downing LLP, explains why this type of student accommodation will remain in demand in the future, despite the impact of Covid and Brexit:

"The market for student accommodation is experiencing some challenges due to Covid and Brexit may also impact EU students studying in the UK. Nevertheless, the underlying dynamics of the UK student market remain strong.

"The undersupply of purpose-built student accommodation in cities across the UK is an ongoing issue which we aim to play our part in tackling by providing debt funding for projects of this kind. This deal is an excellent example as it involves an experienced developer committed to ensuring a high-quality build. We look forward to supporting the developer and would also like to thank Stan Lersch of Property Finance Services for introducing the deal."

Howard Garland, Partner, Pollen Street Capital commented:

"We would like to thank Parik and the team for all of their hard work in originating and closing this deal. We are pleased to have supported another development through our co-funding partnership with Downing and look forward to continuing to build this relationship. It is excellent to start to see the positive impact of our partnership in improving access to finance for SME developers around the UK.”

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About Downing

Downing LLP is an investment manager with over 30 years of experience, more than £1 billion assets under management and 25,000 investors. The business has made a firm-wide commitment to the principles of responsible investment by assessing opportunities for both their profitability and their environment and social impact. Downing believes this approach can make investments more rewarding: rewarding by being profitable for its investors, rewarding by being supportive to the businesses it funds and, through their success, ultimately rewarding for society.

Downing LLP is authorised and regulated by the Financial Conduct Authority (FRN: 545025).  Registered in England and Wales (No. OC341575). Registered Office: 6th Floor, St Magnus House, 3 Lower Thames Street, London EC3R 6HD.

About Pollen Street Capital

Pollen Street Capital is an independent alternative investment management company, focused on accelerating the progress of the financial and business services sectors. It was established in 2013 and operates across private equity and credit strategies on behalf of investors including leading pension funds, asset managers, banks, and family offices from around the world. Pollen Street has a team of 75+ professionals with offices in London and New York City.

The Real Estate credit team at Pollen Street focuses on attractive LTV bridging and development lending to SMEs, which has generally been underserved by banks and institutional lenders. The team generally accesses this market sector through selective lending partnerships with non-bank real estate lending platforms. 

Pollen Street Capital Limited and PSC Credit Holdings LLP are authorised and regulated by the Financial Conduct Authority (“FCA”) and entered on the Financial Services Register (Registered Numbers 611337 and 650207).