Nuveen finances $275m senior loan supporting purpose-built student accommodation

Global asset manager Nuveen has provided an AU$275 million senior loan to the Dexus Opportunity Funds and Marquette Properties.

The capital supports the acquisition of a B-Grade office building in the Brisbane CBD and its refurbishment into a modern, purpose-built student accommodation (PBSA) facility.

The asset is uniquely positioned to provide high quality student accommodation conveniently close to the Queensland University of Technology CBD campus, and with easy access to the recently announced Griffith University CBD campus.

Once complete, it will hold space for 1,200 beds spanning 27 levels and offer best-in-class amenities for residents across gyms, cinemas and other communal areas. It also benefits from access to various retail, parkland and transportation offerings nearby. Construction is due to commence late 2024 with completion expected late 2026.

Dugald Marr, Managing Director and Head of Debt for Australia & New Zealand at Nuveen said:
"With solid population growth, record low vacancy and limited supply in prime locations, we believe the Australian living sector offers increasingly attractive investment opportunities.

"This transaction, supported by a prime site and like-minded partners Dexus and Marquette, is another example of our commitment to providing competitive funding solutions to markets with strong underlying fundamentals.

"Nuveen made its first commercial real estate debt investment over 90 years ago and has since built a real estate debt platform with over US$44bn AUM. Our teams understand the need to provide borrowers with competitive funding solutions and have the ability to move quickly to provide execution certainty.

"The loan is aligned to Nuveen's Real Estate Debt strategy, which makes Core loans and Core Plus loan investments to institutional borrowers with security over prime assets in preferred sectors. Proper debt sizing and loan covenants also ensure principal protection for investors whilst earning attractive loan investment returns."

Jason Howes, Fund Manager DREP1 & DREP2 Funds, Dexus said:
"Nuveen's commerciality and structuring expertise has delivered an efficient and competitive debt structure, very much a key element in making this project possible. Significantly, the project leverages the platform capabilities of Dexus across our acquisition, development, office, infrastructure and ESG teams to deliver PBSA beds into an underserved market."

The transaction is being acquired through Dexus's opportunistic fund series, Dexus Real Estate Partnership 1 and 2 (DREP1 and DREP2), with 5% of the economic interest held by Marquette Properties. Dexus and Marquette Properties will be joint development managers. The refurbishment will also be supported by Hutchinson Builders and Nettletontribe Architects who are all leaders in their space.

Toby Lewis, Founder & Managing Director, Marquette Properties said:
"This was a complex transaction that involved Marquette bringing together multiple counterparties to deliver what will be a marquee PBSA asset in the Brisbane market. The Nuveen team is well known to us and had the expertise to structure a debt solution that supported this project and will ultimately drive value for our investors and partners. Our business is based around adding value and delivering on a strategy and we can only achieve this with trusted partners. We look forward to executing many more transactions alongside the Nuveen Debt team."