Three major PBSA schemes topped out despite Covid roadblock

14 December 2020 | Investment

Student accommodation provider Future Generation is ending the year on a high note by topping out three schemes in two months amidst repeated national lockdowns.

The schemes took nine months to complete, with build contracts only signed in March 2020. Neither construction project was financed by debt, despite being worth a combined £105 million.

Andrew Southern, chairman of Future Generation, was joined by Dominic Trainor, contracts director at McAleer & Rushe, as well as Hesham Al Gassab and Sami Saeed, both principals at Tadhamon Capital, for topping out ceremonies at the company’s projects in Nottingham and Loughborough earlier this month.

Luxurio in Loughborough and The Vantage in Nottingham will between them create 943 student beds close to top-tier universities, with gross development values (GDVs) of £51 million and £54 million respectively.

The speedy progress of these schemes came alongside the quick headway made on a third purpose-built student accommodation (PBSA) development during the pandemic – the Guilden Park scheme in Guildford, Surrey. This is also being constructed by McAleer & Rushe.

Guilden Park – often regarded at the ‘jewel in the crown’ of Future Generation’s portfolio – is the provider’s largest scheme to date, with a GDV of £115 million.

The process hasn’t been smooth sailing, however. McAleer & Rushe had to negotiate a six-week shutdown of the sites during the first lockdown, disruption to the supply chain and far-reaching social distancing measures upon their return as they battled to get the schemes back on schedule for the start of the 2021 academic year.

The firm also had to change its procurement regime so supply chains ran faster, hold daily project management meetings to accelerate the pace of construction and change the procedure for design approvals.

Future Generation’s relationships with its lenders also paid off early on. It was able to refinance two of its other PBSA projects in Colchester and Sheffield in March.

Special changes were also made to the design of the buildings in light of coronavirus. Arrangements were made to fit all air conditioning units with special anti-bacterial filters, and alterations were made to the ducting in buildings to prevent air from one room circulating around the rest of the building.

“People throw the word ‘teamwork’ around but we’re going to need a new entry in the dictionary for what it meant for us this year,” says Southern.

“We’ve dealt with everything the pandemic could throw at us. Keeping three schemes of this size on track was no small achievement. We’re incredibly proud of our team and very impressed by the commitment and resourcefulness McAleer & Rushe have shown in adapting to a difficult commercial environment.”

“These schemes have gone up so fast they rival modular building solutions for pace. We exit 2020 feeling very confident in our pipeline and looking forward to welcoming students to all three projects next year.”

Dominic Trainor, contracts director at McAleer & Rushe, adds: “There have certainly been several obstacles to overcome this year and our team have shown great determination to get us to where we are today. None of it would have happened, though, without a level of collaboration that I’ve never experienced before.”

“Full credit goes to Andrew Southern and his team for going to extraordinary lengths to assist us in finding solutions at every turn and, of course, I’m incredibly proud of our own team who proved equal to the challenge.”

This post has originally been featured in Property Investor Today.