Student Developments Driving Out Coventry's Businesses
20th Jul 2018
Unite Group, the UK's largest student accommodation provider, has announced its £137m acquisition of Cordea Savills' 2,900-unit student accommodation portfolio. The acquisition will see the Unite UK Student Accommodation Fund (USAF), in which the Unite Group has a 21% holding, increase its 24,500 bed portfolio by 10% in value.
The acquisition, which was funded through cash and existing debt facilities, has added accommodation units to the USAF portfolio in Bath, Birmingham, Bradford, Bristol, Edinburgh, Leeds, Loughborough, Portsmouth and Preston, with the accommodation in Bath and Portsmouth both boasting long term nominations agreements with universities.
According to Mark Allan, CEO of Unite Students, "We are delighted that USAF has been able to complete this important acquisition from Cordea Savills. The combination of Unite's existing operational presence across the country, USAF's financial capacity and the Group's position as lessee on two highly reversionary assets means that a combination of Unite and USAF is uniquely well placed to unlock the potential of an excellent regional portfolio".
The move by Unite Group is the latest in a string of high profile acquisitions and investments across the UK, and is in anticipation of a wave of new students entering the UK's higher education system following moves by George Osborne last November to remove caps on the number of students that universities can enrol. It is expected that the decision by the Chancellor last November will generate an influx of foreign students that typically prefer higher quality premium accommodation catered for by the likes of Unite and Liberty Living.
Over the last 5 years, the student accommodation market has seen a dramatic transformation, with the once exclusively private-landlord-supplied market now subject to increasing attention from institutional investors such as pension funds and sovereign wealth funds. In the first four months of 2014 alone, there were £950m worth of transactions in the market, according to figures from Savills, a property adviser.
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