The loan will be used to refinance an existing bank facility for its flagship Unite UK Student Accommodation Fund (USAF), which matured in Q1 2024.

The funding builds on the strong relationship between Unite Group and LGIM and follows on from LGIM’s £400m senior loan in July 2023 which was used to refinance a public bond for USAF. 

LGIM believes that the student accommodation sector will benefit from a relative lack of new speculative development, which should support rental growth while supply issues in conventional buy to let residential — which would normally offer an option for students — will drive demand towards fit for purpose accommodation.

It sees fundamental support from an increase in international student numbers over the long term, together with growth in younger age cohorts domestically.

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Selectivity based on the strength of the university will remain vital as LGIM sees increasing differentiation in higher education as a long-term trend.

James Spencer-Jones, head of real estate debt Europe at LGIM, said: “We are delighted to continue building on our long-standing relationship with Unite Group.

“We see continued resilience within the PBSA sector, driven by strong investment and occupational fundamentals.

“This funding delivers both flexibility for USAF whilst retaining strong structural capabilities and investment characteristics for our investors.”

Gary Leadbeater, director for group treasury and FP&A at Unite Group said: “This transaction is a further endorsement of the leadership credentials of both parties within the sector, further demonstrating the strength of our relationship with LGIM.”