Watkin Jones has finalised a finance agreement to proceed with a 397-bed purpose-built student accommodation (PBSA) project in Stratford, London, UK.
This marks the company's first collaboration with Housing Growth Partnership (HGP).
The forward sale of the Stratford development, which includes working space and commercial units, has been arranged with HGP.
This transaction is expected to yield approximately £96m ($123.49m) for Watkin Jones over the three-year construction period.
The project's margins are anticipated to align with the group's targets, offering a chance for Watkin Jones to benefit from future value increases.
A new joint venture (JV) entity, Watkin Jones (Grove Crescent) Holding, has been formed to facilitate this venture, with HGP holding a 75% stake and Watkin Jones retaining 25%.
Watkin Jones will oversee the scheme's delivery and manage the property post-completion through its subsidiary, Fresh.
The JV will be financed by HGP and supplemented by third-party debt finance.
The completion of the PBSA is aimed for the 2026-27 academic year, with income distribution expected to occur throughout the construction phase.
Following the project's completion and stabilisation, the JV plans to sell the scheme, known as the 'Realisation Sale'.
However, given the construction timeline, any potential sale is not anticipated before the fourth quarter of 2026.
Watkin Jones CEO Alex Pease said: "We are pleased to collaborate for the first time with Housing Growth Partnership on this exciting development. The innovative nature of the transaction underlines Watkin Jones' ability to find attractive structuring solutions for our institutional partners.
“While we remain encouraged by signs that confidence is returning to our residential-for-rent funding markets, this is tempered by continued uncertainty around the trajectory of interest rate cuts. We, nevertheless, have a number of schemes in the market which are generating good levels of interest.”
Last month, Watkin Jones received approval for its PBSA scheme on Malago Road, Bedminster, Bristol.
