Emirates NBD and Abu Dhabi Islamic Bank Close £140 Million Club Deal for Prime London Student Accommodation

2 Min | 19 December 2024

Landmark Transaction Highlights UAE Banks’ Collaboration in Strategic UK PBSA Asset

Dubai/Abu Dhabi, UAE, 19 December 2024: Emirates NBD, one of the UAE’s leading financial institutions, has led the successful closure of a £140 million senior financing transaction for a prime Purpose-Built Student Accommodation (PBSA) asset in central London, in collaboration with Abu Dhabi Islamic Bank (ADIB). This 50/50 club deal marks a significant collaboration between the two banks and enhances the UAE’s banking presence in key international markets.

The financed asset, Paddington Citi View, comprises 353 premium bedrooms with modern amenities in a high-demand area just 100 meters from London’s Paddington Station, providing the capital’s student population with exceptional connectivity to top academic institutions across the city. Formerly known as Lillian Pension Hall, the property was acquired by Union Property in 2022 from the University of London. Its location and quality make it a distinguished offering in London’s competitive PBSA market.

Raj Sehgal, Managing Director at Union commented: “Paddington Citi View is a great addition to our portfolio and is perfectly positioned to meet the demand from the city’s student population for premium living options that are close to London’s academic institutions. We are thrilled to have collaborated with Emirates NBD and ADIB on this deal, which has been executed efficiently to support our strategic objectives.”

Carlo De Vos, Head of Corporate & Institutional Banking at Emirates NBD, said: “We are pleased to have supported this debt facility, which underscores our capability to deliver strategic, structured Islamic and conventional financing solutions to international clients. This deal reflects our focus on funding high-quality assets and supports our strategy to work with strong counterparties, like Union Property, across our key international markets.”

Paul Maisfield, Head of UK Real Estate at ADIB, said: “We are excited to have closed this landmark deal alongside Union and our partners at Emirates NBD. The highly structured 50% conventional and 50% Islamic financing showcases our strong commitment to innovative financing solutions alongside trusted financial partners. In a market where asset values have adjusted notably over the past two years, ADIB remains focused on financing assets with sustainable rental income growth potential. Our criteria for investment prioritise asset quality, ESG credentials, and sector-specific supply and demand factors. Paddington Citi View met all these criteria, reflecting our strategic approach to resilient investments.”

The UK’s PBSA market continues to attract significant interest from global investors. According to Knight Frank, approximately £840 million was invested in the sector during Q3 2024 across 15 deals, with a year-to-date total of £3.3 billion, surpassing the same period last year by £1.3 billion. This transaction volume accounts for 46% of global capital flows into PBSA assets in 2024.

ADIB has a strong track record in the “UK Living Sectors”, recently closing financing for other high-profile assets, including a 613-unit Co-Living project in North Acton, a 300-unit PBSA in Kingston upon Thames, and a 90-unit PBSA in Manchester, as well as a portfolio of residential assets comprising over 160 apartments in Manchester.

Legal advisory for Emirates NBD was provided by Addelshaw Goddard LLP, while ADIB and Union Property were advised by Foot Anstey LLP and Muckle LLP, respectively.

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