De-risking specialist Pension Insurance Corporation (PIC) has helped to hedge its long-term liabilities by investing in another student housing project.
It has lent £37m to University Partnerships Programme, which will use it to build 382 rooms across two blocks for the University of Exeter.
This is the fifth such transaction between the two parties since 2014, which has built more than 4,500 rooms for students studying in Swansea, London and Kent.
Rental property is a source of stable and regular income in the UK thanks to a growing population and under-supply of new builds.
The inflation-proof loan will provide a regular cash return for PIC until 2065, when it matures.
Modern, purpose-built accommodation is in high demand by students who have to pay for their education and want a better living experience.
PIC has FTSE 100 companies, public sector bodies and multi-nationals among its clients. Its deals this year have included insuring £1.3bn of liabilities for tech company Siemens and a £200m buy-in with DIY retail chain Kingfisher’s final salary scheme.
In the first half of 2018, PIC insured £3.2bn of new business covering 14,000 pension scheme savers, beating the £1.9bn it wrote 12 months earlier.
