PIC invests £128 million in low-carbon transformation of University of Birmingham student accommodation

Pension Insurance Corporation plc ('PIC'), a specialist insurer of defined benefit pension funds, has completed a £128 million secured debt investment into the University of Birmingham, enabling it to transform its Pritchatts Park Student Village site into a 1,230-room low-carbon residential facility. The development is a vital part of the University’s growth ambitions and is a key on-campus accommodation offered by the University.

The low-carbon design of the upgraded accommodation will be achieved using solar photovoltaic panels wherever possible, along with direct electric heating. The upgraded buildings will also improve air quality through a zero-carbon emissions strategy. To date, PIC has invested more than £11 billion in socially beneficial investments in the UK, which meet wider Environmental, Social and Governance investment criteria, creating jobs, helping the transition to a greener economy, and balancing intergenerational equity.

The University of Birmingham is a Russell Group university, and it is ranked within the top 20 universities nationally and the top 100 universities globally.

Key points of the transaction:

• The investment is inflation-linked and is PIC’s first investment linked to CPI in the sector
• The proceeds will be used to finance refurbishment of existing estate, construction of new rooms and their operations 
• The deal uses a deferred drawdown structure, whereby the debt will be drawn down over three tranches during the construction period
• The debt will mature in 2069, matching PIC liabilities 
• The project is sponsored by a consortium comprising Equitix, Equans and the University of Birmingham

Simon Bray, Director of Campus Services at the University of Birmingham, said: “This is a very important investment for us as it helps us to achieve our growth ambitions, as well as reducing our carbon footprint. The PIC team have been flexible and have been innovative in their approach; we are very pleased to have been able to conclude a transaction that meets all of our needs.”

Florence Carasse, Senior Debt Origination Manager at PIC, said: “PIC has a long track record of investing in the UK’s university sector, and we are delighted to help the University of Birmingham achieve their growth ambitions whilst being so climate friendly. These sorts of investments are important for us because they back our future pension payments, so the more social value they provide, the more likely they are to help us fulfil our purpose over future decades.”

Jake Fellows, Regional Operations Director at EQUANS, said: “EQUANS has a multifaceted offer which spans construction, regeneration, energy and zero carbon technologies, so we are perfectly placed to bring the University of Birmingham’s vision for a low-carbon, high quality student campus to life. 

“We are delighted to have reached financial close on this hugely significant project and every partner involved in this deal is passionate about its success.”

Hugh Crossley, Chief Executive Officer at Equitix, said: “We are delighted to work with the University of Birmingham and be part of their continued growth and success and are pleased to extend our strong track record in developing and operating outstanding accommodation that exceeds residents’ expectations.

“Equitix has a long-standing relationship with PIC who is a trusted partner and lender to a number of accommodation projects within the Equitix Funds.”

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For further information please contact:

Pension Insurance Corporation     
Jeremy Apfel                         
+44 (0)20 7105 2140 
apfel@pensioncorporation.com

ApellaAdvisors                                
Andrew Brown                      
+44 (0)7721 513777                 

Janelle Romano                     
+44 (0)7792 173071           
PIC@apellaadvisors.com

About Pension Insurance Corporation plc
The purpose of PIC is to pay the pensions of its current and future policyholders. PIC provides secure and stable retirement incomes through leading customer service, comprehensive risk management and excellence in asset and liability management. At half-year 2021, PIC had insured 270,800 pension scheme members and had £47.6 billion in financial investments, accumulated through the provision of tailored pension insurance buyouts and buy-ins to the trustees and sponsors of U.K. defined benefit pension schemes. Clients include FTSE 100 companies, multinationals and the public sector. PIC is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and Prudential Regulation Authority (FRN 454345). For further information please visit www.pensioncorporation.com

About the University of Birmingham

The University of Birmingham is ranked amongst the world’s top 100 institutions, its work brings people from across the world to Birmingham, including researchers and teachers and more than 6,500 international students from over 150 countries.