Investec provides Scape £55m loan for Walthamstow co-living

Investec arranges a £55m loan for Scape Group's co-living scheme in Walthamstow, London, which will be launched under the Morro brand.

Investec provides a loan to fund Scape's new co-living scheme in Walthamstow, which is launching under its Morro brand | BTR News
Investec provides a loan to fund Scape's new co-living scheme in Walthamstow, which is launching under its Morro brand.

Investec Real Estate has arranged a £55m loan to fund the development and stabilisation of a co-living scheme in Walthamstow, London, with purpose-built student accommodation (PBSA) and co-living provider Scape Group.

Scape Group has secured planning permission for the 321-bedroom co-living scheme at 1 Blackhorse Lane, which will launch under the Group’s Living brand – Morro.

Amenities include shared communal spaces, a ground floor public café and retail unit, and a purpose-built music and comedy venue. At the Zone 3 scheme, Scape Group is targeting an EPC A rating and BREEAM ‘Excellent’ certification. The co-living scheme is set to complete in 2025.

The Walthamstow co-living development benefits from excellent transport connectivity, with access to both the London Underground Victoria Line and Overground networks via Blackhorse Road station located opposite the scheme.

“We’re thrilled to be partnering with Investec who have a fantastic record of consistently delivering funding for Scape Group, particularly during challenging times.

“With our growing pipeline of Morro and Scape PBSA developments we look forward to continuing our well-established relationships with both Investec and APG. Our growth strategy remains as ambitious as ever – we’re actively seeking new opportunities in the PBSA and living spaces.”

Adam Brockley, Founder & Chief Development Officer, Scape Group

Investec’s previous co-living presence includes the joint venture between Scape Group and HG Construction with a £53.5m senior debt facility in 2021 to fund the development of 113 Morro co-living units and 403 PBSA beds in Guildford. Occupationally, the asset has performed strongly since opening and has significantly outperformed the original rental underwrite.

“With demand for high quality, well-connected rental accommodation in London continuing to outstrip supply, the appeal of co-living as an asset class to both investors and residents is pushing this nascent sector further into the mainstream.

“Our most recent Future Living report echoed this sentiment by highlighting the positive outlook for and expected investment activity into co-living. This Blackhorse Lane transaction is an exciting expansion of our exposure to the co-living space, which we believe is very underinvested, and will enable Scape Group to grow and enhance its portfolio.

“This is our sixth loan with Scape Group, whose track record in sourcing and delivering highly desirable and extremely well managed PBSA and living assets speaks for itself. We look forward to seeing the development progress and continuing to work together.”

Hollie Sleigh, Investec Real Estate

Investec’s third Future Living report, which was published in October last year with data gathered from 50 global institutional investors representing over £400bn of AUM, revealed that almost half (46%) of respondents were considering investing in co-living in the next five years and that investment activity in the sector has doubled since 2021 – the biggest jump out of all the Living asset classes over that period.

Currently, Scape Group has 4,200 beds in operation and a further 2,700 in development.

“We’re excited to bring this scheme forward and open our first Morro building in central London. We’ve had incredible support from Waltham Forest council who have seen the value in our proposition for their growing community.

“Morro is ideally suited to this diverse, rapidly changing neighbourhood and presents us with many fantastic opportunities for collaboration with the many artists and makers in the local area.”

Charles Moran, Planning Director, Scape Group