Student housing sale shows sector ‘in good shape’
Goods Corner: part of deal
Two blocks of student accommodation in Edinburgh and Leicester have been sold in a £22.2m deal said to reflect the resilience of the sector.
Goods Corner in Edinburgh comprises 108 studio bed spaces close to the University of Edinburgh’s King’s Building Campus, the main campus of the College of Science and Engineering.
Dover Street in Leicester comprises 135 bed spaces and is located in the heart of the city, close to the railway station, University of Leicester and De Montfort University.
Both properties were constructed in 2018 and each have been 100% let with strong bookings for the 2020/21 academic year. The buyer is 90 North Real Estate Partners, in partnership with Rasameel Investment Company.
Advisers to the deal say the combined purchase price represents the strength of the student accommodation sector in the UK, despite the current challenging economic climate, and demonstrates that the fundamentals of the market, such as university performance, asset quality, occupancy levels and micro-location, remain strong.
UK developer, Aimrok, sold the freehold interest in each asset and was advised by Russell Hefferan and Olan Coyle in Cushman & Wakefield’s Student Accommodation Capital Markets team. Barclays Bank provided senior debt to the buyer.
Russell Hefferan, partner at Cushman & Wakefield, said: “Whilst in the immediate term COVID-19 presents obvious challenges for the industry, this transaction provides an excellent example of the strong, long-term fundamentals student accommodation offers.
“Overall, in the UK there is a healthy amount of student applications, with overseas numbers ahead of 2019 according to UCAS. From 2021 there is also going to be a continued increase in the number of UK 18-year olds coming through the system.
“The demand and supply dynamics remain positive for the sector and it is in good shape to weather the storm.”
John Yeend, Partner at 90 North Real Estate Partners, commented: “These two new properties are in core locations and provide housing to high-ranked universities in undersupplied markets. With structuring to ensure continuity of income to cover this current period of occupational uncertainty, we expect these investments to deliver strong performance.”
Homes for Students will manage and operate both assets on behalf of the purchaser.