Duke of Westminster’s property company loans £40m to refurbish student scheme

The building, completed in 2012, already has an EPC A rating, but further environmental enhancements will be installed including solar panels and smart building technology to reduce energy use.

Grosvenor’s private credit business was launched in 2022 and has since financed more than 4,100 homes across the UK through land bridge loans, development loans and investment loans.

The business aims to deploy approximately £1bn over the next 10 years. Grosvenor was advised on the loan by CBRE.

Steph Ball, investment director at Grosvenor Property UK, said: “By lending from our own balance sheet, we can provide flexible, tailored capital and deliver with the speed and clarity our partners expect.”

Damien Pasini, investment director at BauMont Real Estate Capital, said: “Manchester is among the UK’s most attractive PBSA markets, underpinned by scale, a sustained supply-demand imbalance, and the presence of leading academic institutions.”

This summer, research from Knight Frank found that 65% of existing PBSA stock in the UK was delivered before 2012, which needs to be upgraded to meet modern consumer and investor expectations. This has created an untapped opportunity in the PBSA market to drive value by upgrading and repositioning existing stock.

Banks have retreated from development lending since the global financial crisis, leading to a rise in so-called private credit deals as developers turn to private capital to finance their schemes.

Last month, private equity giant Blackstone and finance provider Pluto Finance announced they would lend £2bn across the living sector in the UK and continental Europe.

In its 2024 results, Grosvenor reported a 16% rise in profit at £86.4m. The wider company, which bills itself as one of London’s “great estates”, owns £8.2bn of property including offices, flats and shops in Mayfair and Belgravia.

Grosvenor Hart Homes (GHH), Grosvenor’s for-profit affordable housing provider, completed its registration with the Regulator of Social Housing in June 2024. Over the next 10 years, GHH is looking to provide over 750 homes alongside tailored intervention support, with a focus on Chester, the North West and central London.