Loan Security Level 2 Flashcards
What did you comment on the location for Loughboruogh?
- Deemed the site to be within a city centre location, albeit some distance from the university campus.
- This was in keeping with much of the private stock within Loughborough
- Close to city centre amenities
Why did you deduce the income was secure in Loughborough?
- Secure income due to strong track record
- No wider influences that would impact the income during the loan terms
- limited pipeline
- No legislation to change in demand of students
What was the LTV for Loughborough?
50% - in line with lenders appetite for risk
What were the loan terms?
5 years with 2 -1 year extensions
What were the strengths of Loughborough?
- Fully let
- Premium service offering and amenity
- High specification
- High ranked uni
- C3 residential consent to let to non-students
What were the weaknesses of Loughborough?
- Unmet demand is relatively low
- strong HMO market in Loughborough
- converted office - less desirable than purpose built
What were the opportunities of Loughborough?
Secure a nominations agreement
What were the threats of loughborough?
- 608 - consented beds in pipeline
- premium offering may limit potential demand for the property (unlikely to impact marketability)
For Loughborough - what did you advise on the marketability?
- We consider the market for the subject property is strong
- Likely timescales to exchange are 9-12 months.
- Potential purchasers may include private equity funds, PropCos and REITs such as Empiric.
- The small size of the asset may be less appealing to larger, institutional investors, but increase the appeal and affordability for high net-worth individuals and family offices.
What was the MV and Yield for Loughborough?
£14,350,000
NIY: 6.50%
What were the strengths of Exeter?
Modern PBSA completed for 2021/22
Fully let for last 3 academic years
Premium service offering
Extensive range of communal facilities
Strong macro location – Exter ranked 11th best University
Large student catchment, with 25,930 full time students studying at the University of Exeter
BREEAM excellent
What were the weaknesses of Exeter?
Minimal economies of scale given that it is relatively small in PBSA terms
Non-prominent micro location
What were the opportunities of Exeter?
Secure a nomination agreement
Reduce operational expenditure
What were the threats of Exeter?
Increasing competition from emerging PBSA schemes, including some university operated stock
How did you comment on the threats?
I noted that whilst this is a threat, it would unlikely impact the value due to the strong level of unmet demand in Exeter. As such, it would unlikely materially impact overall supply levels and subsequently rental growth prospects.’
