Emirates NBD & ADIB Close £140M Deal for London Student Housing

London’s student housing market has witnessed a monumental shift with the closure of a £140 million financing deal led by Emirates NBD and Abu Dhabi Islamic Bank (ADIB). This landmark club deal not only underscores the growing appeal of Purpose-Built Student Accommodation (PBSA) but also highlights the strategic role of global financial institutions in shaping the future of student housing in London.

The prime asset at the heart of this deal is Paddington Citi View, a state-of-the-art PBSA facility offering 353 premium student bedrooms. Positioned just 100 meters from London’s bustling Paddington Station, this development is set to provide unmatched connectivity to world-class academic institutions across the city. Here’s an in-depth look at this high-profile transaction and its impact on the future of London’s student housing landscape.

The Prime Asset: Paddington Citi View

Formerly known as Lillian Pension Hall, Paddington Citi View has become a hallmark of modern student living in London. Acquired by Union Property from the University of London in 2022, this asset represents a fresh take on PBSA design, featuring contemporary living spaces and premium amenities that cater to the evolving needs of modern students.

With 353 fully furnished bedrooms and modern communal areas, Paddington Citi View is purposefully designed to provide students with more than just a place to stay—it offers a living experience. Its location, less than a minute’s walk from Paddington Station, places students within easy reach of London’s top universities, including Imperial College London, UCL, and the London School of Economics (LSE).

The facility offers students access to high-speed internet, state-of-the-art study spaces, on-site gyms, and social lounges to foster a community-like atmosphere. As the demand for premium student accommodation continues to rise, Paddington Citi View’s unique blend of modern amenities and prime location sets a benchmark for PBSA in London.

Key Takeaway: Paddington Citi View’s prime location, modern amenities, and connectivity to top academic institutions make it a standout in London’s student housing market.

The Role of Emirates NBD and ADIB

The £140 million club deal is a 50/50 partnership between Emirates NBD and ADIB, two of the Middle East’s most prominent financial institutions. This deal not only cements their presence in London’s student housing sector but also underscores the growing influence of Middle Eastern banks in key international markets.

Carlo De Vos, Head of Corporate & Institutional Banking at Emirates NBD, highlighted the significance of this investment, stating, “This transaction reflects our focus on high-quality assets with stable income potential and supports our strategy to work with strong counterparties like Union Property.”

Paul Maisfield, UK Chief Country Officer at ADIB, emphasized the strategic nature of this deal, saying, “This structured financing showcases our strong commitment to innovative financing solutions alongside trusted financial partners. Our criteria for investment prioritise asset quality, ESG credentials, and sector-specific supply and demand factors. Paddington Citi View met all these criteria.”

Both banks are committed to supporting sustainable investment opportunities, with ESG (Environmental, Social, and Governance) compliance playing a critical role in their decision-making process. Their involvement highlights the increasing role of ESG-driven investment strategies within the PBSA market.

Key Takeaway: The successful closure of this deal demonstrates the strategic role of Emirates NBD and ADIB in financing high-quality, income-generating student housing assets in London.

What Sets London Student Housing Apart?

The UK’s Purpose-Built Student Accommodation (PBSA) market is one of the most dynamic real estate sectors globally. According to Knight Frank, the total value of transactions in the UK PBSA market reached £3.3 billion in the first three quarters of 2024, up from £2 billion in the same period the previous year. This surge in investment reflects the increasing demand for high-quality, well-located student accommodation in key cities like London.

London’s student housing market is characterized by:

• Strong Demand: With over 500,000 higher education students in London, the demand for safe, high-quality student accommodation continues to grow.

• Stable Rental Yields: PBSA properties offer stable and predictable rental income, making them a popular choice for institutional investors.

• Global Investor Interest: 46% of global capital inflows into the UK’s PBSA sector in 2024 targeted London, making it a focal point for major financial players.

As more students seek affordable yet high-quality housing options, the demand for PBSA units is expected to increase steadily. The availability of housing that provides an all-inclusive experience (rent, bills, and social activities) appeals to international students seeking a hassle-free living experience.

Key Takeaway: London’s growing student population and demand for premium living options make PBSA an attractive investment for global financial institutions and real estate developers.

How This Deal Impacts London’s Student Housing Market

This high-profile deal is expected to create ripple effects across London’s student housing sector. Here’s how:

1. More International Investments: The success of this deal highlights London’s appeal as a safe investment destination for Middle Eastern banks and global institutional investors.

2. Increased Competition for Prime Assets: As demand for PBSA increases, competition for prime assets like Paddington Citi View will drive up property values.

3. Enhanced Student Living Experience: With a focus on premium design and modern amenities, properties like Paddington Citi View raise the bar for student living in London.

The broader impact on the UK’s PBSA market will be felt as global investors continue to seek stable, income-generating real estate assets. As property values rise, there is potential for increased rental yields, creating a win-win for developers and investors alike.

Key Takeaway: By showcasing the financial and strategic appeal of London’s student housing market, this deal is likely to inspire more international investors to seek opportunities in the PBSA sector.

The Influence of M.E. Banks in London’s Property Market

The involvement of Emirates NBD and ADIB in this deal reflects a growing trend of Middle Eastern financial institutions expanding their footprint in London’s real estate market. Over the past decade, Middle Eastern banks have played an increasingly important role in financing commercial and residential real estate in the city.

Notable factors driving this trend include:

• Diversification of Investment Portfolios: Middle Eastern banks seek to diversify away from oil and gas revenues by investing in stable, income-generating assets like London student housing.

• Strategic Alliances: Partnerships with established developers and property owners provide banks like Emirates NBD and ADIB with access to high-value projects.

Key Takeaway: With strategic investments in student housing, Middle Eastern banks are solidifying their role as major players in London’s real estate sector.

The Broader Impact on the UK Market

Beyond London, the UK’s broader PBSA market has seen remarkable growth. The sector’s resilience amid economic fluctuations makes it a magnet for foreign capital. According to reports from Savills, the PBSA market’s total transaction volume for 2024 is expected to surpass £4 billion, driven by sustained demand from both domestic and international investors.

With the number of international students projected to increase in the coming years, the demand for PBSA will continue to grow. This demand is further bolstered by strong support from universities, which often prioritize partnerships with developers to guarantee high-quality, affordable housing for students.

Key Takeaway: The PBSA market’s strong growth and resilience to market volatility make it one of the most sought-after real estate asset classes for global investors.

The £140 million financing deal for Paddington Citi View signifies a major milestone in the growth of London’s student housing market. The collaboration between Emirates NBD and ADIB reflects the strategic role of global financial institutions in shaping the sector’s future.

As demand for premium student accommodation continues to grow, so does the competition among global investors to finance prime PBSA assets.