The joint venture (JV) formed between Zenzic Capital and Torsion Group has successfully negotiated a refinancing agreement worth £63 million for three purpose-built student accommodation (PBSA) assets located in the United Kingdom. This strategic move is indicative of the ongoing commitment of both companies to enhance their footprint within the PBSA sector, which has shown resilience despite prevailing market challenges.
This refinancing was facilitated by an affiliate of Cerberus Capital Management and is intended to support the JV’s ambitious goal of assembling a portfolio with a gross development value (GDV) of approximately £500 million. This portfolio is set to encompass over 2,000 beds, through both the enhancement of existing properties and the construction of new assets, which is a growing focus in the competitive UK PBSA market.
Details of the Refinancing Agreement
As part of the refinancing, a new five-year investment facility has been established which will redeem three development loans previously held against each of the assets. These loans were initially sourced from Zorin Finance, Ingenious Group, and Atelier Finance, demonstrating a calculated approach to financial management within the joint venture.
The three assets included in this refinancing deal collectively comprise 476 beds, boasting an impressive occupancy rate of 99% during their inaugural year of operation. The management of these assets falls under the purview of LUNA, a subsidiary of Torsion Group, which has been instrumental in ensuring high occupancy rates and tenant satisfaction.
Key Assets in the Portfolio
Among the three assets, Burnsall House in Warwick serves as a pivotal location, catering to students from both the University of Warwick and the University of Coventry. In addition to this, the portfolio includes a 137-bed property in Nottingham and a 205-bed development currently underway in Leeds. The Leeds asset, known as Kirkstall Road, is slated for completion by the 2027-28 academic year and will feature modern amenities such as co-working spaces, communal lounges, and a gym, enhancing its appeal to prospective tenants.
Leadership Insights
Nadine Buckland, the chief executive of Zenzic Capital, commented on the positive momentum within the joint venture, noting that despite encountering challenges in certain segments of the PBSA market, the high occupancy rates achieved reflect the superior quality of their assets. Buckland expressed optimism about future growth opportunities, stating, “We look forward to working with our partners to grow the portfolio through acquisition or development opportunities in the months ahead.”
Dan Spencer, the chief executive of Torsion Group, highlighted the significance of this refinancing as a landmark achievement for both Torsion and their partnership with Zenzic. Spencer remarked, “This refinancing is a significant milestone for Torsion and for our joint venture with Zenzic. It reflects the successful delivery and stabilisation of these assets and demonstrates the strength of our fully integrated model across investment, development, and operations.”
The successful execution of this refinancing deal not only strengthens the financial foundation of the joint venture but also positions Zenzic and Torsion favourably for future investments in the dynamic UK PBSA market, where demand continues to outstrip supply in many regions.