M&G Investments, one of Europe’s leading institutional investors, has committed £266m of client capital to a senior mortgage loan as part of the acquisition of the Nido portfolio of student accommodation by Round Hill Capital. The portfolio comprises three high quality sites in London which provide accommodation for a total of 2,530 students.
As in many real estate sectors, buyers of student accommodation are turning to institutions such as M&G to secure debt finance, as banks are retreating from the market due to capital constraints. This financing is now M&G’s second loan against student accommodation.
M&G believes this deal is one of the largest commercial mortgages provided in the UK in 2012 to date and, once funded, it will take M&G’s total commercial mortgage lending to £1.2bn in a ten month period.
M&G plans to follow up its success in both senior and junior mortgage loans with two new funds – one in each sector – for institutional investors. This will be the first time M&G has offered its senior mortgage expertise to investors other than its internal clients. Details of both funds are to be confirmed. M&G expects its first junior debt fund, which closed in June 2011, to have fully committed its capital by the end of the second quarter 2012.
