Aberdeen Accommodation up for Sale
18th Mar 2019
Three blocks of student accommodation at Abertay University have been put on the market.
Described as an investment opportunity, the student accommodation can house 144 people and is up for sale for offers over £4 million.
Kingsway Apartments in Dundee offers a projected yield of £600,000 a year, according to the agent Shepherd Chartered Surveyors.
Consisting of 38,400 sq ft, the building is in the north of the city off Alloway Place and was used as purpose-built student accommodation (PBSA) in the 80's and was refurbished in 2013 and 2017.
The site comprises of three three-storey blocks of six flats with eight single bedrooms and a shared lounge-kitchen.
Commenting on the site, Jonathan Reid, partner at the Dundee office of Shepherd Chartered Surveyors, said: "Situated on a prominent location adjacent to the outer ring road, the Kingsway Apartments are HMO granted and income producing, with a projection of £600,000 per annum."
"Enjoying excellent working relationships with universities and colleges in the city, long-term contractors use stretching back 20 years makes this site an excellent investment opportunity."
"With solid long-term corporate customers and university take up, as well as the huge demand for quality affordable student accommodation in Dundee, we anticipate keen interest in this opportunity. The 3.9 acres site offers potential for redevelopment and conversion to alternative uses. All interested parties should make their own enquiries to Dundee City Council Planning Department."
AIG Global Real Estate is eyeing up additional investments in Dublin's student accommodation sector after it completed a forward purchase for Lidl Ireland's North Quarter scheme in Ballymun.
The company's head of UK and Ireland residential acquisitions, Naveen Patha, cited the acute gap between supply and demand in Dublin's student accommodation market as a reason for the purchase.
He added: "We are investigating the potential for building new projects in this great city, which will add to our existing 2,500-bed student housing portfolio located throughout Sheffield, Leeds, Southampton, Cardiff, Bournemouth, and Coventry."
AIG has purchased the North Quarter scheme for a figure in excess of EUR 46m. The development consists of 364 student bedrooms split across two buildings, along with ancillary retail space and two cafes.
North Quarter is located just off the main street on Balcurris Road in Ballymun, which is around 1.4km from Dublin City University's main campus and 1.2km from the sports grounds of Trinity College Dublin.
The development is due for completion in 2020 and forms part of the wider North Quarter development, which once complete, will incorporate a separate Lidl supermarket, office accommodation, retail space and cafes.
Greystar has led a consortium of buyers that has purchased a purpose-built student accommodation asset in Shoreditch for £160m.
The accommodation was previously owned by Apache Capital but was snapped up by Greystar, along with partners Public Sector Pension (PSP) Investments and Allianz Real Estate.
Consisting of 458 student bedrooms, the residence is located in the heart of London's tech scene and sits close to Amazon's UK headquarters.
The acquisition boosts Greystar's Chapter portfolio, highlighting the company's commitment to the London market.
Commenting on the purchase, Troy Tomasik, Greystar managing director of investments in the UK and Ireland, said: "Greystar is excited to be expanding the Chapter portfolio with another high-quality student accommodation asset in London, which remains the premier global city for international students with its world-class universities and higher education institutions."
"We strongly believe that Paul St. East has significant long-term potential through integrating the asset with our Chapter brand to offer students the exceptional services and experiential living enjoyed at Greystar's other Chapter residences."
Europa Generation, a joint venture between Europa Capital and Generation Estates has raised almost £100m for its UK student accommodation fund.
The Europa Generation Student Fund already manages assets worth £180m and has held its first close by bringing in several unnamed global institutional investors.
The fund was set up nearly two years ago when fund manager Europa Capital used its balance sheet to seed it with a £165m portfolio.
The fund also has an additional 144 beds in Oxford that are due to become operational this year.
Europa Capital is looking to establish a portfolio of modern purpose-built student accommodation in UK cities and will seek to exploit those that show favourable market dynamics.
Commenting on the fund, Alan Artus, partner at Europa Generation, said: "The student accommodation sector remains a highly attractive market that is resilient to economic headwinds and continues to offer favourable supply and demand dynamics."
"The shortage of modern, high quality accommodation in leading university towns and cities is demonstrated by the strong level of demand we have seen across our operational portfolio."
Summix Capital Ltd has submitted plans to build a £15 million student development in Edinburgh.
The proposed 198-bed scheme will feature 208 cycle spaces and will be made up of both cluster flats and studios.
It will also come equipped with community and office space, student common areas and laundry facilities.
If granted planning permission, the development is expected to create 85 jobs.
Summix Capital is expecting the number of full-time students in the city to increase by 14% by 2022, leading to increased demand for student bed spaces.
Commenting on the plans, the company said: "We are delighted to submit this application for high-quality student accommodation which will serve to redevelop a location in previous commercial and industrial use."
"Given the high sustainability of the location there is no requirement for car parking spaces beyond those for the City Car club and disabled spaces, and we are ensuring that there is excellent provision of bicycle spaces."
"The development also serves to address the increasing demand for student accommodation, fulfilling the ambitious growth plans of universities in the city, which are key drivers of the economy. This also helps to reduce pressure on the private housing market as well as delivering a substantial amount in additional expenditure into the local economy."
Watkin Jones has completed the forward sale of a purpose-built student accommodation development in Wembley.
The company said the consideration payable to Watkin Jones over the course of the project would be around £90m, net of client funding and acquisition costs.
The brand-new student accommodation is expected to be delivered in time for the 2021-22 academic year and will deliver a margin in line with target returns.
Once delivered, the scheme will be managed by Fresh Student Living, which acts as the group's accommodation manager.
The Wembley scheme has planning permission for 599 student beds, along with associated amenity and management space.
The purpose-built student accommodation forms part of a wider mixed-use site that also contains build-to-rent apartments.
The sale to DWS represents the company's first UK PBSA acquisition and marks a significant step towards the company's strategy of investing in sector in both the UK and Ireland.
Commenting on the deal, Richard Simpson, chief executive at Watkin Jones, said: "The Wembley regeneration story is remarkable and it is firmly established as a destination of choice by students for their accommodation."
"Our track record in developing into the robust UK PBSA sector is well proven as this transaction highlights."
"We look forward to deepening our development pipeline and leveraging our expertise further."
Members of the public will soon get the chance to look behind the scenes of a new student accommodation development in Aberdeen.
The Pittodrie Street scheme will be open to tours between March 19-21st, providing people with the opportunity to see how work is progressing.
The first block was completed in August 2018 and contained 133 bedrooms, whilst the second block, which will accommodate 485 student rooms, is due to be completed in May.
Gordon Milne, managing director of Robertson Eastern, said: "Pittodrie Street will have a hugely positive impact on the city's student population. We're looking forward to welcoming in members of the public so they can see the project for themselves while it's taking shape."
The brand-new accommodation will be managed by Student Roost and is already being advertised for the 2019-20 academic year.
The developer has completed the deal with a gross development value of £194m with iQ Student Accommodation.
Olympian Homes purchased Hume House in Leeds, with construction work on transforming the site into 752 student bedrooms already underway. The development is due to be completed in 2021 and will mark iQ's third scheme in the city.
Olympian Homes has also snapped up land along Lamb Street in Coventry and plans to build 1,200 student beds. The huge development will consist of three buildings and will be delivered across phases.
The first phase will comprise 832 beds and includes a 20-storey tower on the junction of Bishop and Lamb Street, with the residence due to open in time for the 2020-21 academic year.
Commenting on the deal, Simon Murray-Twinn, chief executive of Olympian Homes, said: "We are extremely proud to have iQ Student Accommodation as our partner for the projects and have worked closely together in partnership to design two very bespoke buildings that are unique and tailor-made to each market."
"We are looking forward to creating an iconic building in each city, both of which are centred on iQ's philosophy to put the student experience at the forefront of design and living."
Iliya Blazic, chief investment officer at iQ Student Accommodation, added: "We are delighted to have completed this deal with Olympian."
Coventry City Council is considering whether it should introduce a Community Infrastructure Level (CIL) to raise funds from developers undertaking new building projects in the city.
Fund raised from a CIL can be used to fund a range of infrastructure projects, including schools, roads or health facilities.
The level of fees payable by developers would be dependant on the floor space and type of development, with the council particularly interested in how they could be used for student accommodation.
Other local authorities have implemented similar schemes, with Bristol City Council raising £7.3m from CIL charges on student accommodation over the last six years.
A council report on the idea said: "The levy creates a financial charging system with the majority of building projects potentially qualifying to contribute towards additional infrastructure that is needed to support wider planned development across the city."
"The levy also has far greater certainty in that it provides the basis for a charge in a manner that the planning obligations system alone could not easily achieve."
A CIL would be supplementary to existing S106 contributions, which are agreed between the local authority and the developer, rather than a fixed charge.
The idea of a CIL is still in an early phase and would still need to go through a period of consultation before being adopted.
The latest data released by HESA, covering the 2017-18 academic year, shows the number of full-time students in higher education increased 2.6% year-on-year, to 1.84m.
Whilst the number of full-time postgraduates increased 5.7% in 2017 (2016: 5.3%), full-time undergraduates grew by just 1.9% (2016: 2.9%).
Split by domicile, the number of full-time non-EU students increased 4.6%, having grown by just 0.2% in the previous year. Meanwhile, UK and EU (exc. UK) full-time students increased by 2.0% and 4.1% respectively.
Whilst year-on-year growth was positive on a national basis, there are some clear individual winners and losers.
Russell Group Universities have performed strongly, with full-time student numbers at these institutions increasing by 3.5% in 2017-18.
Therefore, they continue to capture an increasing proportion of the full-time student population, with 31.0% of all full-time students now attending one of the 24-member institutions. This compares to a market share of 28.2% recorded in 2010.
On an individual basis, those that reported strong year-on-year growth in full-time students include De Montfort University (+12.9%), Plymouth Marjon University (+12.4%) and the University of Reading (+8.9%).
At the other end of the scale, some of the largest declines were reported by Kingston University (-9.2%), the University of Bedfordshire (-7.0%) and London South Bank University (-5.7%).
Universities that have reported steady declines in student numbers will no doubt closely follow the outcome of the Augar review, which could lead to a cut in tuition fees. A reduction in fees will directly impact university funding, adding further pressure on those already facing a reduction through fewer students.
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