Student Accommodation Block Purchase in a University City
£2,100,000 · 20 years · 6.45% fixed 5 yrs. A property investment company was acquiring a purpose-built student accommodation (PBSA) block of 34 studio rooms in a strong university city.
The Client
Property investment company
The Challenge
A property investment company was acquiring a purpose-built student accommodation (PBSA) block of 34 studio rooms in a strong university city. The block was fully let on standard student ASTs. PBSA requires specialist lender knowledge as the letting structure differs from standard residential.
Our Solution
Doulton placed the mortgage with a lender experienced in PBSA assets. The full occupancy history, university partnership for referrals, and the city's student population data all supported the income case. An interest-only period for the first five years was negotiated to optimise early cash flow.
The Outcome
Block acquired at full occupancy. Interest-only period improving early cash flow materially. Gross rental yield on purchase price: 7.8%. Capital growth in the PBSA sector in this city has been consistent at 4--6% per annum. Key highlights: Specialist PBSA lender experience - student letting structure accepted; Interest-only first 5 years negotiated to optimise cash flow; Gross yield 7.8% with consistent 4--6% pa capital growth.