Financial services firm Canada Life loans UCLan £30 million in exchange for student accommodation rent

The international insurance and financial services company, Canada Life Asset Management has loaned the University of Central Lancashire £30 million pounds to improve student experience in exchange for student accommodation rent.

The deal will provide the university with cash to deliver its Strategic Plan 2021-2028, while the investor will accrue rent from three student blocks in Preston city centre for the next 40 years.

Under the terms of the 40-year finance lease, Canada Life will earn rent from Ribble Hall, Roeburn Hall and Whitendale Hall, which comprise 184 flats and are capable of accommodating around 1,000 students.

Yearly rent earned by Canada Life across the halls will start at £854,000, with annual rental uplifts of between 1% and 5%.

In turn, UCLan will invest the £30 million from the deal to deliver on its strategic plan, which includes increasing the number of clinical facilities for medical science courses and improving several university buildings, including student accommodation.

On the expiry of the finance lease in 40 years time, the property will revert to the university.

Michael White, head of UK property at Canada Life Asset Management, said: “We are delighted to be supporting the University of Central Lancashire with a significant loan facility of £30m to help in the delivery of its strategic plan.

“This 40-year financing arrangement reflects Canada Life Asset Management’s ongoing appetite to provide substantial, long-term facilities to high-quality sponsors that offer attractive income cash flows in support of our bulk annuity business.”

Graham Baldwin, vice-chancellor of the University of Central Lancashire, said: “We welcome this new relationship with Canada Life Asset Management to provide £30m of funding that will be used as part of our future capital expenditure on key initiatives to support our strategic goal of providing an improved student and colleague experience.”