Watkin Jones has forward sold the PBSA scheme to Housing Growth Partnership (HGP), part of Lloyds Banking Group.
The Stratford scheme is being delivered via an innovative structure that is expected to generate receipts for Watkin Jones over the course of the three year development of approximately £96m, with the potential to participate further from future value generated by the scheme.
A joint venture called Watkin Jones (Grove Crescent) Holding Limited has been established, which 75% owned by HGP and 25% by Watkin Jones. Under this arrangement, Watkin Jones will be responsible for the delivery of the scheme through to completion as well as the ongoing management through Fresh, its accommodation management business. Funding will be provided by HGP as well as third party debt finance. Completion of the PBSA accommodation is targeted for September 2026.
The development, designed by Glenn Howells Architects, is on Grove Crescent Road, on the site of a former Jewsons builders’ merchant. It will also include 2,000 sqm of commercial space. Planning permission was secured in 2022.
Watkin Jones chief executive Alex Pease said: “We are pleased to collaborate for the first time with Housing Growth Partnership on this exciting development. The innovative nature of the transaction underlines Watkin Jones’ ability to find attractive structuring solutions for our institutional partners.
“While we remain encouraged by signs that confidence is returning to our residential for rent funding markets, this is tempered by continued uncertainty around the trajectory of interest rate cuts. We, nevertheless, have a number of schemes in the market which are generating good levels of interest.”
HGP investment director Colin Bennett added: “Establishing our first joint venture with Watkin Jones, one of the UK’s leading PBSA providers, is another milestone for HGP. It also demonstrates the growing demand for our equity offering as a means to accelerate the delivery of much needed Living accommodation across the UK. The demographic and structural drivers underpinning the PBSA sector especially in London, a global leader in higher education provision, are highly supportive. Having surpassed our 10,000 homes target a year earlier than planned, we continue to diversify into new tenures and commit larger investments, whilst continuing to deliver meaningful social impact for both residents and wider communities.”
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