Aviva Investors funds PBSA project in Elephant & Castle

Aviva Investors has provided a green loan to support the construction of a 283-unit PBSA development in Elephant & Castle, London.

Fabrix, 182-202 Walworth Road - © Howells and Vivid Vision

The loan, which adheres to the Loan Market Association’s Green Loan Principles, is the first PBSA investment made by the Aviva Investors Multi-Sector Private Debt Long-Term Asset Fund (LTAF) since its launch, following previous investments in the office and logistics sectors.

Located on Walworth Road, the scheme is the inaugural project for "Sustainable Communities London," a joint venture between Fabrix and Patrizia focused on creating sustainable, affordable, and alternative housing in London by redeveloping underutilised urban sites.

The 12,449 m2 development will offer 283 student beds along with 35% affordable social rent homes on-site. This mixed-use project will also include over 464 m2 of ground-floor retail space, a new landscaped courtyard garden, and more than 241 m2 of dedicated community space, featuring a community kitchen co-created with local charity Pembroke House. Student amenities will encompass study areas, a lounge, dining facilities, a TV/cinema room, a games area, and an on-site gym.

The project aims for a BREEAM 'Excellent' certification and an EPC 'A' rating. Its design prioritises reuse, retaining and remodelling the existing concrete frame of the 1980s building. It will incorporate all-electric heating, air source heat pumps, and on-site renewable energy generation through solar PV. The development is also expected to achieve a 144% biodiversity net gain.

Strategically located in the London Borough of Southwark, the development is just south of the Elephant Park regeneration area and close to prominent universities like the University of the Arts and London South Bank University. Elephant & Castle underground station is an eight-minute walk away, providing quick access to other central London universities. Completion is anticipated in 2028, in time for the 2028/29 academic year.

Sima Kotecha, head of High Yield Strategies, Real Estate Debt, at Aviva Investors, said: “London is home to 37 Universities but faces a structural undersupply of student accommodation, particularly across central areas of the city. We are therefore incredibly pleased to fund this scheme at Elephant & Castle, which we expect will be a core asset in one of London’s main PBSA clusters.”

Matthew Weaver, finance director at Fabrix, added: “Fabrix and Patrizia are delighted to be partnering with Aviva Investors to deliver this transformational project. Its backing represents a strong endorsement of the impact strategy of Sustainable Communities London, which aims to deliver ambitious, high-quality and sustainable developments that address the housing crisis while generating meaningful social impact.”

Marleen Bekkers, fund manager at Patrizia, commented: “This investment reflects Patrizia’s strategy of deploying capital through its pan-European Living platform into high-quality, value-add opportunities in supply-constrained urban markets. In this JV, we are focused on delivering projects in London that combine strong long-term income potential with measurable social and environmental outcomes.”

Aviva Investors was advised by Eversheds Sutherland. Fabrix was advised by Greenberg Traurig and BBS Capital.