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OakNorth Bank and ASK Partners complete a £6.35m loan for new 112-bed Purpose Built Student Accommodation in Falmouth, Cornwall

Student numbers are continuing to rise across the UK. Most campuses have the capacity to accommodate first year students but second and third years rely on HMOs (houses in multiple occupation), 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 local council are working closely with private investors to provide purpose-built accommodation to meet a future requirement of 2000 beds. It is also anticipated that, the appeal of university outside of a big city 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, a £6.35m finance facility provided by real estate funding specialist ASK Partners, alongside a Coronavirus Business Interruption Loan from OakNorth Bank – the UK bank powered by OakNorth – will be used by Hydrogen Falmouth, to develop a five-storey, Purpose Built Student Accommodation, comprising 112 single-occupancy studio apartments. The development is located directly behind Market Street in the heart of Falmouth’s town centre, near shops, bars and cafes and also moments from the sea front. The site is also within walking distance of the Falmouth University campus and with easy reach of Exeter University Penryn campus, which collectively support over 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. This development is in a perfect location for second and third-year students and will offer high-quality rental accommodation. Critically, it also has the potential to release around 30-35 family homes back into the local market.

Commenting on the transaction, 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 Coronavirus Business Interruption Loan (CBIL) for a proportion of the capital required. Through our allocation from the British Business Bank’s schemes, we’ve approved over £450m 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, CEO 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.”

ENDS

Notes to editors

About the Coronavirus Business Interruption Loan Scheme (CBILS)
CBILS is a demand-led scheme offering lending to smaller businesses with turnover of up to £45m. Invoice finance and asset finance facilities are available from £1k to £5m, while term loans and revolving credit facilities are available from £50k to £5m. The government makes a payment to cover interest and lender-levied fees under CBILS for the first 12 months. The scheme is due to close for new applications on 31 January 2021.

About the Coronavirus Large Business Interruption Loan Scheme (CLBILS)
CLBILS is a demand-led scheme offering lending to smaller businesses with turnover of more than £45m. The maximum amount available through CLBILS to a borrower and its group is £200m. Term loans and revolving credit facilities over £50m are offered by CLBILS lenders which have secured additional accreditation. The maximum size for invoice finance and asset finance facilities is £50m. Borrowers are able to spread repayments from three months to three years. The scheme is due to close for new applications on 31 January 2021.

About OakNorth Bank plc
OakNorth Bank provides fast, flexible and accessible debt finance (from £500k to £50m) to fast-growth businesses and established property developers / investors. It has debt finance teams in London, Manchester, Bristol, Birmingham, Leeds and East Anglia.

Since its launch, the bank has:
• Lent over £4.6bn, directly helping with the creation of 16,000 new homes and almost 20,000 new jobs in the UK;
• Raised deposits from c.160,000 savers;
• Supported over 750 businesses across the UK with the debt finance to pursue their growth ambitions

It is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. 

Visit www.oaknorth.co.uk for more information.

Contact
Tom Pavey-Smith, Associate Director – Growth & Communications: tom.pavey-smith@oaknorth.com / press@oaknorth.com / 0791 716 5588

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