Cain nets £500m for PBSA

Developer Fusion Group’s 420-bed Liverpool and 509-bed Manchester student accommodation projects are set to benefit from the investment firm’s forward-funding deal with Menora Mivtachim Group.

The £500m deal between Menora Mivtachim and Cain International is the Israeli insurance company’s first foray into the UK’s PBSA market. Cain International has been working in the space for a while and will use the funds to support five projects: three with Fusion and two with Olympian Homes.

The Olympian Homes schemes are based in Leeds and York. The Fusion projects are in Nottingham, Liverpool, and Manchester.

The Liverpool scheme is on the former Hondo Chinese supermarket site. Planning permission was secured in 2020. Designed by Corstorphine + Wright Architects, the four- to seven-storey block will hold 420 bedrooms and 5,000 sq ft of amenity space. It is on track to be ready for the 2025-2026 academic year, according to Cain.

The Manchester project had a more turbulent planning journey. Also designed by Corstorphine + Wright Architects, the 28-storey Deangsate tower was rejected by Manchester City Council’s planning comittee in 2021. The Planning Inspectorate ultimately overturned the city council’s decision.

Domis is currently on site doing the groundwork for the £56m project, which will comprise 509 student bedrooms and 7,000 sq ft of amenities when it is finished. The site is situated just off Bridgewater Viaduct and Deansgate South.

Cain said the Manchester project would be finished in time for the 2026-2027 academic year.

An affiliate of Apollo Global Management is providing the financing for Cain schemes.

Cushman & Wakefield, Colliers, Herbert Smith Freehills, and Allen & Overy advised Cain International on the Menora Mivtachim deal. Greenberg Traurig represented Menora Mivtachim and Gibson Dunn advised Apollo. Fusion was represented by Mishcon De Reya.

Richard Pilkington, senior managing director and head of European real estate at Cain, described the forward-funding deal with Menora Mivtachim as an “important milestone” in Cain’s PBSA strategy.

“With over 350,000 beds needed nationally to meet the expected demand across the UK’s largest university cities, we believe there is significant opportunity in this market and look forward to delivering and expanding on our strategy through new and existing partnerships,” Pilkington said.

Nir Moroz, chief information officer at Menora Mivtachim, commented: “The international appeal of the UK’s universities, combined with a supply-and-demand imbalance and opportunity to partner with reputable developers, made this forward funding deal a compelling opportunity to enter the UK PBSA market.

“We look forward to further building our relationship with Cain as these assets reach completion.”