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Funding
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Stretched Senior, Student Accommodation Development in Porto, Portugal

Porto
,
Portugal
DEAL
001093
POSTED ON
October 12, 2020
INVESTMENT SUMMARY
IRR
NA
Multiple
NA
LTV
49%
First Year CoC
NA
Stabilised CoC
NA
Status
Funding
Deal #
001093
Asset Class
Student Accommodation
Strategy
Development
Capital Type
Stretched Senior Debt
Deal Size
22.2
m
Investment Size
14.9
m
Holding Period
NA
INVESTMENT HIGHLIGHTS
  • The building is located in close proximity to the Porto University, the Polo Universitario metro line and local amenities , in a highly popular area of Porto. Rents are increasing rapidly in the area which continues to benefit from the growing student population.
  • Porto has a noticeable shortage of student beds, with the current provision of student accommodations, the students to bed ratio is 11:1. The demand for student accommodation is not only represented by international students, but also by Portuguese students who study and live away from their hometown. In 2017/2018 both segments represented more than 165,000 students who needed accommodation, ranging from relatives’ home to PBSA.
  • The property will feature a total of 230 units and 241 beds with 209 Studios, 9 Premium Studios, 1 Adapted Studio, 11 Twin Rooms. The units will be distributed across 13 storeys with an area of around 500 sqm per floor. The single studios will average 17.2 sqm and Twodios 26.9 sqm.
  • The building has a circular design which will allow all rooms to have private balconies and a roof terrace. The scheme will offer concierge and reception services, quiet study zones, co working areas, common areas to relax and socialize, a gym, games room, and cinema & audio visual multimedia room.
  • Estimated GDV of €30.4m, based on a yield of 5.5% (JLL Valuation). Land price of €7.3m. Total development costs, including land, construction and interest, equate to £22.2m. The Sponsor is seeking to raise senior finance of €14.9m equivalent of to 49 % of GDV and 65% Loan to Cost. Remaining development and acquisition costs to be funded via equity equating to €7.3m provided by the Sponsor.
KEY DEAL POINTS

Location
The subject site is located in a mixed residential / university zone in Paranhos parish, approximately 3km north of the Porto City centre. The site is accessed from Rua Dr. Manuel Pereira da Silva to the north and the Rua Manuel Pacheco de Miranda to the west. The site comprises an undeveloped land plot with vegetation or gravel ground cover and is currently
used as an informal car parking area. The land’s total area is approximately 1,472 sqm.

Communications
The site is well located within the universities areas To the right it can be seen the walking distances to each of the university sites. It also has direct access to the metro yellow line which takes 20 mins to the centre of the city.

History/Previous uses
Historical records from the 1940s shows the site to be undeveloped (agricultural use). Anecdotal information from residents indicates that the site has never been developed with buildings.

Porto Student Accomodation
Porto has become fashionable and thus the number of students is continuously growing, reaching 58,200 and representing 16% of total students in Portugal. We are witnessing an increasing and diverse number of nationalities coming straight to Porto, counting more than 7,400 foreign students. In addition, there are 18,000 Portuguese students living out of their hometown, totalling more than 25,000 students with accommodations needs.
Following the national trend and in line with Lisbon, international students are responsible for the turnaround in the decrease of the number of students, evidencing the importance of this market.
Porto has 1,250 rooms at 15 University and Religious Student Housing. Usually they offer low rents ranging from €165 to €430/ month/room. Regarding Private Apartment Operators, JLL count more than 11 players with a total supply of 420 rooms. The existent operators are small.

KEY FINANCIALS
ABOUT SPONSOR
Seasoned Sponsor
A reputable multi-cycle industry operator. Has less than 15 years of verifiable track record and less than $500m in turnover annually or less than $10bn of AUM.
FURTHER IMAGES
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LOCATION
DEAL DATA ROOM
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INVESTMENT SUMMARY
Strategy
Development
Asset Class
Student Accommodation
LTV
49%
Deal Size
22.2
m
Closing
Capital Type
Stretched Senior Debt
Investment Size
14.9
m
Net IRR
NA
Multiple
NA
Holding Period
NA
INVESTMENT DETAILS
  • The building is located in close proximity to the Porto University, the Polo Universitario metro line and local amenities , in a highly popular area of Porto. Rents are increasing rapidly in the area which continues to benefit from the growing student population.
  • Porto has a noticeable shortage of student beds, with the current provision of student accommodations, the students to bed ratio is 11:1. The demand for student accommodation is not only represented by international students, but also by Portuguese students who study and live away from their hometown. In 2017/2018 both segments represented more than 165,000 students who needed accommodation, ranging from relatives’ home to PBSA.
  • The property will feature a total of 230 units and 241 beds with 209 Studios, 9 Premium Studios, 1 Adapted Studio, 11 Twin Rooms. The units will be distributed across 13 storeys with an area of around 500 sqm per floor. The single studios will average 17.2 sqm and Twodios 26.9 sqm.
  • The building has a circular design which will allow all rooms to have private balconies and a roof terrace. The scheme will offer concierge and reception services, quiet study zones, co working areas, common areas to relax and socialize, a gym, games room, and cinema & audio visual multimedia room.
  • Estimated GDV of €30.4m, based on a yield of 5.5% (JLL Valuation). Land price of €7.3m. Total development costs, including land, construction and interest, equate to £22.2m. The Sponsor is seeking to raise senior finance of €14.9m equivalent of to 49 % of GDV and 65% Loan to Cost. Remaining development and acquisition costs to be funded via equity equating to €7.3m provided by the Sponsor.
INVESTMENT HIGHLIGHTS

Location
The subject site is located in a mixed residential / university zone in Paranhos parish, approximately 3km north of the Porto City centre. The site is accessed from Rua Dr. Manuel Pereira da Silva to the north and the Rua Manuel Pacheco de Miranda to the west. The site comprises an undeveloped land plot with vegetation or gravel ground cover and is currently
used as an informal car parking area. The land’s total area is approximately 1,472 sqm.

Communications
The site is well located within the universities areas To the right it can be seen the walking distances to each of the university sites. It also has direct access to the metro yellow line which takes 20 mins to the centre of the city.

History/Previous uses
Historical records from the 1940s shows the site to be undeveloped (agricultural use). Anecdotal information from residents indicates that the site has never been developed with buildings.

Porto Student Accomodation
Porto has become fashionable and thus the number of students is continuously growing, reaching 58,200 and representing 16% of total students in Portugal. We are witnessing an increasing and diverse number of nationalities coming straight to Porto, counting more than 7,400 foreign students. In addition, there are 18,000 Portuguese students living out of their hometown, totalling more than 25,000 students with accommodations needs.
Following the national trend and in line with Lisbon, international students are responsible for the turnaround in the decrease of the number of students, evidencing the importance of this market.
Porto has 1,250 rooms at 15 University and Religious Student Housing. Usually they offer low rents ranging from €165 to €430/ month/room. Regarding Private Apartment Operators, JLL count more than 11 players with a total supply of 420 rooms. The existent operators are small.

Funding
SUMMARY
Opportunity to participate in the development of a unique PBSA project in a prime University location in Porto, Portugal. The Sponsor comprises of an experienced developer and an institutional investor that are contributing +30% of Project Costs in Equity. They are looking for Stretched Senior Debt up to 67% of Project Costs (45% GDV) for construction costs.
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Success! The teaser is being generated. Check your inbox (and spam folder).
Something went wrong. Please contact us on invest@brixflow.com or +44 2081 585 568