Fusion Group (“Fusion”), one of the UK’s largest privately-owned developers and operators of student accommodation, has secured a £500 million whole-loan facility from pan-European real-estate financier Maslow Capital. The facility – one of the largest single-lender debt packages arranged for UK Purpose-Built Student Accommodation (PBSA) – will fund five prime schemes in Birmingham, London, Loughborough, Glasgow and Cardiff, together delivering 3,138 purpose-built beds. The assets will be operated by Fusion under its management platform, which by 2030 will be managing in excess of 11,200 beds.
With fewer than 17,500 new PBSA beds due to complete during the 2024/25 academic year – and planning and viability challenges continuing to hold back delivery – the UK’s structural undersupply shows no sign of easing. The five schemes are scheduled for completion between 2027 and 2028 in cities where planning has already been secured. With UCAS projecting applicant numbers to rise by up to 30 per cent by 2030, Fusion is well placed to deliver critical capacity.
Each of the five assets will feature an extensive array of premium amenities, including dedicated study spaces, fully equipped fitness and wellbeing zones including padel courts, gyms and yoga studios, private dining facilities and expansive landscaped outdoor areas.
The landmark facility was structured by Maslow Capital’s development finance team with Senior Origination Director Sky Mapson and Rachael Gordon, Head of Deal Execution in the UK and Europe leading the financing. Maslow Capital was advised by DLA Piper on all legal aspects of the transaction. Fusion was advised by HSF Kramer.
Ellis Sher, Co-Founder and Chief Executive Officer at Maslow Capital, said: “We remain fully committed to supporting developers of all sizes who are making a much-needed difference to the supply of new accommodation across the UK and Europe. By providing £500 million of long-term l capital, Maslow is helping Fusion turn plans into bricks and beds efficiently and at scale. We look forward to supporting Fusion and continuing to strengthen our long-term relationship.”
Sky Mapson, Senior Director, Origination at Maslow Capital, added: “In a market where demand continues to outstrip new supply, the fundamentals for well-located, purpose-built student accommodation remain exceptionally strong. Structuring a single £500 million facility across five projects allowed us to provide Fusion with the financial firepower to deliver their ambitious pipeline. We’re proud to back a partner of Fusion’s calibre and to demonstrate Maslow Capital’s ability to deploy substantial capital into high-conviction sectors at scale.”
Daniel Harris, Chief Investment Officer at Fusion Group, said: “In a challenging market, there remains substantial opportunities for those with conviction and depth of expertise across the development, operating and capital markets mix. This landmark deal is a testament to the attractiveness of the UK’s living sectors and, in particular, the purpose-built student accommodation market in which Fusion has built a successful track record. The UK remains a deeply attractive market both to institutional capital and, with the support of Maslow, we look forward to building out these five schemes into best-in-class assets at the cutting edge of what students want and what investors need from their real estate projects. It’s a pleasure working with a genuine partner in the shape of the team at Maslow and we look forward to collaborating with the team going forward.”
Nigel Henry, Co-Founder and CEO at Fusion Group, added: “Securing one of the UK’s largest ever living sector development loans demonstrates the quality of our product and team. This is the latest milestone in Fusion’s continuing growth as a developer and long-term owner and operator of assets.”
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