Student housing provider Vita Group Holdings Ltd. has secured over £200 million ($254 million) in debt financing from Eldridge Capital Management’s real estate credit arm for the development of a 48-story tower in London’s Canary Wharf neighborhood.
For Eldridge, a US-based manager of $74 billion in assets, this deal marks the eighth transaction with Vita Group, further extending the firm’s investment in the UK student housing market. This sector has proven more resilient to interest rate pressures compared to other real estate sectors, such as office or retail properties.
John Cole, Eldridge Capital Management’s global head of real estate credit, emphasized the stability of student housing, stating, “Student housing is quite predictable in terms of cash flow and occupancy levels. There are always going to be students.”
Additionally, an increase in the number of American students studying abroad, coupled with the rising costs of US college tuition, is driving demand for student housing in the UK. Cole also pointed to the ongoing housing shortage in the UK, further fueling the need for high-quality accommodations.
London, as the UK’s largest student market, with 42% of its population coming from overseas, faces a significant shortage of student housing. Cole explained, “This debt deal ticks every single box that we look for as a lender.”
The planned development will include 1,068 studio apartments, with a targeted completion date of September 2028. This will be the first purpose-built student housing project in the Canary Wharf district, which has seen a shift away from its traditional focus on office space as companies vacate office buildings. Tide Construction will handle both the development and construction of the tower, which will feature amenities such as a shared gym, cinema, game room, co-working spaces, cafes, room cleaning services, and social events.
The development is strategically located at 30 Marsh Wall, south of the West India Docks and within walking distance of three major public transit stations. The site is less than 40 minutes away from 19 universities, including King’s College, the London School of Economics, University of the Arts London, University College London, and Queen Mary University of London.
Cole highlighted the evolving nature of Canary Wharf, noting, “Canary Wharf has grown and evolved over the years to become a real go-to destination,” and pointed to the opening of the Elizabeth Line railway as a key factor in boosting the neighborhood’s appeal. He added, “They pivoted away from pure office, big time.”
The location offers a strategic advantage for both Vita and Eldridge, as privately owned undeveloped land or existing properties that can be developed are rare in central London. Cole added, “You can’t buy land where these universities are. Even if you could, it’s too expensive. London is different. It’s the access to buildable land that can provide the volume of product required that is the barrier.”
This deal underscores the growing demand for student housing in London and the strategic move by Vita and Eldridge to capitalize on this market.
