A five-storey block of student flats is planned to be built in the centre of the Cornish waterfront town Falmouth after a £6.35million funding package was secured.
Real estate finance specialist ASK Partners has provided funding to Hydrogen Falmouth, the student living arm of a leading property investment and development company, alongside a Coronavirus Business Interruption Loan (CBIL) from OakNorth Bank, to finance construction of the 112-bedroom Purpose Built Student Accommodation (PBSA).
OakNorth Bank says that HMOs (houses in multiple occupation) in Falmouth have reached capacity and Falmouth University and the local authority have committed to provide enough purpose-built accommodation to reduce the demand on family homes in the area.
The bank said there is expected to be high demand for the PBSA from second- and third-year students who prefer to live in the “social epicentre” of Falmouth, although the Falmouth University campus is a short walk away and the University of Exeter’s Penryn campus is easily accessible.
Student numbers are continuing to rise across the UK, the bank said, with most campuses having the capacity to accommodate first-year students but second- and third-years rely on HMOs, putting increasing pressure on residential housing stock which in many cases is already in short supply.
Small towns, such as Falmouth, have no further capacity for HMO accommodation and the university and the council are working closely with private investors to provide purpose-built accommodation to meet a future requirement of 2,000 beds, said OakNorth Bank.
It is also anticipated that the appeal of universities outside of big cities will be far greater in a post-Covid world, which will also bring with it demand for well-designed single-occupancy accommodation.
In this case, the £6.35million finance facility is provided by real estate funding specialist ASK Partners, alongside a CBIL from OakNorth Bank, and will be used by Hydrogen Falmouth to develop the five-storey block of single-occupancy studio apartments.
The planned development is located directly behind Market Street in Falmouth’s town centre, near shops, bars and cafes and moments from the seafront.
The site is also within walking distance of the Falmouth University campus and with easy reach of Exeter University's Penryn campus, which collectively support more than 6,000 students.
Both universities are working closely with Falmouth Council and private investors such as Hydrogen Falmouth, to ensure that they can provide sufficient purpose-built accommodation for the anticipated student numbers.
The planned development will offer high-quality rental accommodation and has the potential to release around 30-35 family homes back into the market.
Roger Lal, director of Finance for Hydrogen Falmouth, said: “The site at Fish Strand Hill is an excellent location for student accommodation in Falmouth.
“We are committed to delivering a well-designed scheme and will continue to work closely with the universities to ensure requirements are met and that students integrate well into this vibrant local community.
“The funding provided by both parties will be instrumental in keeping this development on track through the Coronavirus pandemic and to meet future student demand.”
Hemesh Patel, property finance director at OakNorth Bank, said: “We were delighted to assist with financing this development. As Hydrogen Falmouth suffered major delays in construction as a result of Covid-19, we were delighted to be able to provide a CBIL for a proportion of the capital required.
“Through our allocation from the British Business Bank’s schemes, we’ve approved over £450million of loans since March. We have worked with ASK on a number of transactions in the past and are always happy to review the new investment opportunities they put forward.”
Daniel Austin, chief executive of ASK Partners, said: “The student housing sector holds great investor appeal given its counter-cyclical nature. We are anticipating a growing demand as more investors look to diversify into real-estate asset classes that will perform well during a downturn.
“We are delighted to have completed another transaction with both OakNorth Bank and the team at Hydrogen Falmouth. This is an exciting scheme with great potential.”
