(Bloomberg) -- Student housing provider Vita Group Holdings Ltd. has secured more than £200 million ($254 million) in debt financing from Eldridge Capital Management’s real estate credit arm to build a 48-story tower in London’s Canary Wharf neighborhood.
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For Todd Boehly’s Eldridge, a US-based manager of $74 billion in assets, the financing marks the eighth transaction with Vita, according to a statement reviewed by Bloomberg News. The deal extends the firm’s bet on student housing in the UK, as it rides momentum in a real estate niche that has withstood interest rate pressures better than office or retail properties.
Student housing is “quite predictable in terms of cash flow and occupancy levels,” John Cole, Eldridge Capital Management’s global head of real estate credit, said in an interview. “There are always going to be students.”
In an added boost for the European market, increasing numbers of American students are earning their degrees overseas as college prices in the US soar. Meanwhile, the UK is plagued by a housing shortage.
“As the UK’s largest student market, with 42% of its population coming from overseas, London faces a significant shortage of high-quality accommodation,” Cole said in the statement. He added that the debt deal “ticks every single box that we look for as a lender.”
The development, with 1,068 studio apartments, is slated for completion in September 2028, according to the statement. It’s the first purpose-built student housing in the Canary Wharf district, which is recalibrating in the wake of office tenant departures. Tide Construction will be the developer and contractor for the project, which will offer amenities including a shared gym, cinema and game room, plus co-working spaces, food and beverage cafes, room cleaning services, and social events.
Located at 30 Marsh Wall south of the West India Docks and within walking distance of three major public transit stations, the site is less than 40 minutes away from 19 universities, including King’s College, the London School of Economics, University of the Arts London, University College London and Queen Mary University of London.
“Canary Wharf has grown and evolved over the years to become a real go-to destination,” Cole said, adding that the opening of the new Elizabeth Line railway boosted the neighborhood. “They pivoted away from pure office, big time.”