Blackstone to Acquire iQ Student Accommodation
26th Feb 2020
Cambridgeshire County Council has blamed competition for not showing the early returns it expected on the £38 million purchase of a 251-bed block of PBSA in Cambridge.
The council's commercial and investment committee recommended the purchase of the site last year but said by the end of October 2019 an underachievement at Brunswick House was partially to blame for income dropping below budget.
A finance monitoring report presented to the committee projected a shortfall in income across all investments of £877,000.
This was an increase of £335,000 from the previous forecast and was worse than expected due to an overspend of £322,000 related to "additional reactive maintenance required to corporate buildings."
A large proportion of this shortfall was attributed to Brunswick House and delays in completing on an acquisition in South Cambridgeshire.
In January the commercial and investment committee was told that occupancy levels of Brunswick House were below target for the current academic year.
"There is a brand new competing property in the vicinity of Brunswick House, however, the council is confident the offer and location of Brunswick House overall will remain very appealing to students for the years ahead."
"Active/varied marketing activity is continuing via the operator of the accommodation."
Brunswick House was acquired from Apache Capital Partners at a net initial yield of 4.76%, an apparent record in the UK for a direct-let student asset outside of London and the M25.
