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Acquired Glasgow Building to Become Student Housing

Posted by Calum Martin in

Image courtesy of Flickr, (View licence)

A building at 225 Bath Street in Glasgow, which is to be demolished and replaced with student accommodation, has been acquired for £9.3m.

Planning consent for the scheme had already been granted to IQ student property in February 2022. The construction will see an additional 527-beds brought to the city, which has recently struggled with a supply of student accommodation.

Real estate investment trust AEW UK is behind the sale. The firm stated: "The sale realises a long-term change of use strategy for the asset with contracts for the sale having been exchanged with a subsidiary company of IQ Student Accommodation in October 2020."

The sale had required AEW UK to: "negotiate with tenants to bring the asset to vacancy and, as a result, following its sale the occupancy rate for AEWU'S remaining portfolio will increase to 91.6% from 86.97% as at 30 June 2022".

The firm continued: "Reinvestment of the sale proceeds into pipeline assets under exclusivity is expected to provide a significant boost to the company's earnings due to both higher levels of anticipated income receipts and lower running costs".

Laura Elkin, portfolio manager, AEW UK REIT plc, said: "As the culmination of a long-running business plan, we are delighted to see this sale complete. The disposal not only maximises the value of the asset but will increase occupancy level ls across the remaining portfolio, reduce running costs and boost earnings, once capital is reinvested. The proceeds from the sale are already under offer to assets in exclusivity and, as such, we expect to make further purchase announcements in the coming weeks."