Mapletree Raises $535 Million for Its Student Accommodation Trust

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Singapore-listed Mapletree Investments Pte Ltd has successfully raised $535 million for its Mapletree Global Student Accommodation Private Trust (MGSA P-Trust).

The Singapore-based trust focuses on the student accommodation market and currently holds around $1.3 billion in student housing assets, totalling 14,000 beds, across the UK and United States.

Around $243.25 million of equity was raised for the 5,910-bed UK portfolio and $291 million for the 8,363-bed US portfolio. The funding has a term of five years, with a provision for a one-year extension.

The Trust is managed by Mapletree Real Estate Advisors Ptd. Ltd, a wholly-owned subsidiary of Mapletree. The group company will retain a 35% stake in MGSA P-Trust, within the range of stakes it has taken in its other sponsored funds and trusts.

The largest investors include The Great Eastern Life Assurance Company Limited, as well as DBS Bank and UBS AG, who are investing in the Trust on behalf of their high net worth clients.

Commenting on the funding, Mapletree's Group CEO, Hiew Yoon Khong, said: "The successful close of MGSA P-Trust is testament to investors' confidence in Mapletree's track record of delivering the desired returns levels. Opting for the private track also allowed us to bring the product to market quickly, and is more cost effective to set up and operate on an ongoing basis, without the lengthy process to launch and IPO and the increasing compliance costs to maintain a REIT."

Hiew also indicated the company will continue to develop innovate real estate investment products and that investors into MGSA P-Trust will be able to achieve strong returns from an asset class proven to be relatively anti-cyclical.

GSA's Building Programme Extends to Asia

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Global Student Accommodation (GSA), which recently revealed plans to build over 3,000 student beds in the UK as part of a £300 million construction programme across the UK, has now revealed plans to target Asia.

The company has entered a partnership with Star Asia Group, an independent management group, to develop student accommodation in Japan.

GSA Star Asia KK was created to develop student accommodation to support the Japanese government's growth in higher education strategy.

The partnership will open its first student accommodation scheme in 2018. Situated in Tokyo's district of Bunkyo-ku, the accommodation will consist of 364 student beds.

The new purpose-built student accommodation will be available to both international and domestic students and will include facilities such as communal lunges, study areas and a theatre room.

It's reported around 80% of Tokyo's university population lives in private rented accommodation and there's an increasing requirement to fulfil the demand of student accommodation in the city.

The country plans to attract 300,000 international students to the country by 2020 and reported a 13% year-on-year increase in 2015.

Commenting on the project, Simon Loveridge, managing director of Asia Pacific of GSA, said: "Japanese students are ready for this new concept in student communal living, built on high quality design and aimed at building a strong community of local and international students."

GSA already owns student housing across six countries and also plans to substantially increase its foothold in the Irish market with a EUR 250m investment.

Unite Disposes of Woburn Place for £135 Million

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Unite Students has announced the disposal of Woburn Place in London for £135 million to GCP Student Living PLC.

GCP Student Living PLC, is a Real Estate Investment Trust (REIT) and already owns a number of student accommodation schemes across London, Egham, Guildford and Bristol.

The property was part of Unite's LSAV joint venture, and the price reflects a value per bedroom of £316,000, a net initial yield of 4.5% and a 6% premium to book value.

Situated in Bloomsbury, Woburn Place is a direct let student accommodation block consisting of 427 bedrooms, which are predominantly studio en-suites.

The disposal of the site forms part of Unite's strategy to take advantage of the ongoing strength in the investment market and substantially completes plans to recycle £150-£200 million of assets during 2017.

The proceeds of the sale will be put towards the company's development pipeline and further investment into higher quality investments such as the recently acquired on-campus accommodation at Aston University.

Following the disposal, the group's LTV will fall to 32%.

Commenting on the sale, Richard Simpson, Group Property Director, said: "We will continue to invest in our highly accretive development pipeline and to target further acquisitions that enhance the quality of our portfolio and support earnings growth. Our strategy remains focused on high quality Universities, where we see the most long-term growth."

Bank Backed by Cambridge College Continues to Expand

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The bank, Cambridge & Counties, which is jointly owned by Trinity Hall, part of the University of Cambridge, and Cambridgeshire Local Government Pension Fund, has loaned out more than £500 million to small firms since its launch.

The bank saw its loan book increase 41% last year, increasing from £416m to £588m, while deposits at the bank rose 45% to £685m. Pre-tax profits for 2016 increase 78% to £18.1m.

Cambridge & Counties was established in 2012 to support small and medium-sized businesses. The goal was to use long-term funds controlled by the college and pension fund, to fill a perceived gap in the market by lending to companies with a turnover and assets of less than £25m. The bank hoped the venture would generate profits but also fulfil a socially useful purpose.

Although competition for lending to small businesses has increased since the bank was established, C&C insists there is still plenty of room for growth.

The buy-to-let part of the bank, which predominately serves professional landlords in the midlands and the north of England, has reportedly seen no slowdown post the Brexit referendum. According to chief executive Mike Kirsopp, the bank wants to grow that side of the business into the south of the country as well, via its Bristol office.

The company expects its growth for 2017 to be similar to what it recorded the previous year and has increased its workforce to meet the demand of new business.

Empiric Agrees New Loan Facility

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Empiric Student Property plc has announced the company has agreed a new unsecured term loan facility of £10 million with First Commercial Bank Limited.

The funds are available to be drawn down over the next 12 months and will be repayable three years from the date of agreement, with an all-in cost of 2.15% per annum.

The facility can be used for general corporate purposes including the financing of the purchase of properties by any Group company to be operated as student accommodation, or in refinancing the costs of acquisition of such properties.

Commenting on the Facility, First Commercial Bank said: "Empiric has established itself as a leading investor in the highly attractive UK student accommodation market. First Commercial Bank is pleased to provide support for their future growth plans."

Meanwhile, Chief Executive of Empiric Student Property plc, Paul Hadaway, said: "This is the first unsecured loan we have secured at the PLC level which reflects the maturity of the business. The new facility provides the Company with additional flexibility in financing future acquisitions, within our target loan-to-value parameters. This is a new debt funding relationship and we look forward to working with First Commercial Bank in the future."

Pension Infrastructure Platform to Invest Heavily in Student Housing

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Arlington Advisors is teaming up with Pensions Infrastructure Platform (PiP) to invest in the UK's student housing market.

Pip, an infrastructure investment platform for UK pension funds, has entered into a strategic partnership with Arlington Advisors, to invest in accommodation situated on university campuses.

Arlington Advisors, which offers advice to European and Middle Eastern investors, has pumped more than £500 million into UK student housing in recent years.

The company said it will help PiP increase its exposure to student housing and in particular, those situated on-campus.

According to the advisory firm, universities are increasingly looking to bring in outside investment and expertise to bring forward on-campus student accommodation developments.

Founder and chief executive of Arlington Advisors, George Shweiry, said: "We are continuing to see record levels of demand for high quality, appropriately priced and well-maintained student accommodation, and universities are increasingly recognising the value in partnering with professional investors and managers."

Meanwhile, Mike Weston, chief executive of PiP added: "PiP is focused on core investment that delivers long-term, inflation-linked cash flows, and we see student accommodation as a key growth opportunity in this market that provides these attributes for UK pension schemes."

Arlington has so far invested in 7,800 student beds across 10 UK cities. The company acquired over £250 million of student housing assets in 2016 and is looking to increase the pace of investment in 2017 and 2018.

Bournemouth University Vice-chancellor Under Fire for Pay Rise

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The vice-chancellor of Bournemouth University has come under fire for taking a 20% pay rise, while his staff received an increase of just 1%.

Professor John Vinney has drawn criticism for taking pay and benefits worth £305,000, according to a report by the University and College Union (UCU).

The increase in remuneration was the third largest individual pay rise in UK universities and follows previous criticism received in 2014 when the university awarded him a 19% pay rise.

Commenting on the pay rise, UCU general secretary Sally Hunt said: "Staff and students at the University of Bournemouth might be surprised to learn that the vice-chancellor enjoyed an inflation-busting pay rise of 20% at a time when staff pay is being held down and student fees are set to rise.

"Unless government steps in, we believe some vice-chancellors will continue to spend public money and students' fees with impunity. The huge disparities in the levels of pay at the top expose the arbitrary and secretive nature of senior pay and perks in our universities."

In response Bournemouth University indicated that professor John Vinney's pay package is set by the university's independent remuneration committee and that his basic salary remains in line with the average salary when compared across the sector.

Fast-Track University Courses Proposed by Government

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The government is to introduce fast-track university degrees with higher annual fees.

Under the plans, the two-year degrees will cost the same as a traditional three-year course, meaning annual fees will be higher.

Ministers are expected to put forward a bill to lift the current £9,000 cap on tuition fees so universities can charge higher annual rates associated with courses with a reduced length.

The Department for Education stressed the fast-track degrees will carry the same weight as the current undergraduate model.

Under the proposals, universities will be able to charge more than £13,000 a-year for those courses that are cut down to two years and will only apply to institutions in England. Annual fees for four-year courses being delivered in three years could rise to £12,000 a year.

The increased fees will be limited to those courses being accelerated and delivered in fewer years, with universities having to prove they're investing the same resources into the fast-track students.

Education ministers have suggested the reduced course time-frame will appeal to those looking to get into, or return to, the workplace or those looking to cut down on living and accommodation costs.

Those partaking in the new system will forgo the long summer and winter breaks in exchange for the shorter course duration.

The proposal to lift the cap on tuition fees for fast-track students is part of a range of changes set to be included into the higher education and research bill.

According to University minister Jo Johnson, the new bill will provide students with new and flexible ways of learning.

Commenting on the plans, he said: "Students are crying out for more flexible courses, modes of study which they can fit around work and life, shorter courses that enable them to get into and back into work more quickly and courses that equip them with the skills that the modern workplace needs."

Unite Group Reports Increase in Earnings for 2016

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Unite Group has reported a 24% increase in EPRA earnings for the year ending December 2016.

The group reported a 24% rise in adjusted EPRA earnings to £61.3 million versus £49.5m reported a year earlier.

Profit before tax was reported at £201.4 million for the 12-month period, which includes property revaluations of £136.3 million. This represents a decline on the previous year where profit before tax was recorded at £388.4 million, with £324.6 million attributed to property revaluations.

As a result, EPS came in at 101.3p versus 164.2p in 2015 due to the lower level of revaluation surplus as a result of yield compression in 2015.

During the period the group maintained a portfolio of 49,000 beds at a value of £4.3 billion, an increase on the 46,000 beds it held at the end of 2015.

For 2017 Unite is expecting its rental growth to be in the region of 3.0-3.5%, supported by its relationships with universities and student number growth. However, this represents a compression on the 3.8% growth in rental income which it recorded for the 2016-17 academic year.

The group has maintained a positive outlook, with 75% of its bed spaces being reserved for the 2017-18 academic year, up from the 67% reported at the same time a year earlier. For the 2016-17 academic year occupancy rates stand at 98%.

Unite has increased the proportion of beds let to Universities with 58% or rooms now under nomination agreements, up by 5,000 beds over the past three years. It expects this to remain around this level in the future. The company also noted that rents on nominations are around 5% lower than their direct let equivalents but sees opportunities to close this discount in the coming years.

With a development portfolio of 7,000 beds, in addition to its expected rental growth, the group expects it could add 15-20p to earnings over the next few years.

Despite UCAS recently reporting a fall in the number of EU domiciled students applying to study at university for the 2017-18 academic year, as of the January 15 deadline, Unite does not expect Brexit to significantly impact student numbers and will continue to focus on its relationships with high to mid-ranked Universities.

Commenting on the results, Chief Executive of Unite Group, Richard Smith, said: "These are another excellent set of results that reflect the quality of our people, properties and service execution that sets us apart in our sector. Looking forward, we will maintain the quality of our portfolio through development and also strategic acquisitions such as our recent purchase of Aston Student Village, our first on-campus. Students and Universities remain our core focus and we will continue to invest in our operational capabilities, providing excellent service and ensuring consistently high satisfaction levels. This strategy, plus the ongoing strength of UK Higher Education, student numbers and the demand for beds means we are confident in further growth."

Unite Snaps up £227m Aston University Accommodation

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Unite has acquired 3,067 beds through the acquisition of Aston Student Village in Birmingham.

Purchased for £227 million in a 50:50 joint venture with GIC, the Singaporean wealth fund, Aston Student Village (ASV) represents Unite's first major on-campus acquisition.

The asset consists of 3,067 beds across five large, detached properties on Aston University's campus in central Birmingham.

ASV is the only accommodation currently offered to students studying at Aston University, which has a student population of 11,000, with no additional accommodation available either under direct ownership or through nomination agreements. Currently the accommodation is fully occupied.

Due to the purchase Unite now has a portfolio in Birmingham of over 5,000 beds. The company also hopes the acquisition will provide opportunities to establish a long-term strategic partnership, which may include bed nominations.

Unite is looking to invest further money into the site during the summer to help enhance the student experience and product for customers as well as drive rental growth opportunities once the buildings are integrated into their PRISM operating system.

The purchase price represents an acquisition yield of 5%, which is expected to grow to 6% following additional investment into the property. ASV will sit within Unite and GIC's LSAV 50:50 joint venture and Unite expects the acquisition to add approximately 1-2p to the Group's annual EPRA Earnings on a recurring basis.

Commenting on the site, chief executive officer Richard Smith, said: "I am delighted to announce this acquisition, our first on campus. Birmingham is one of the top cities for students and this acquisition demonstrates the value of our strong relationships with Universities and also the benefit of our position as market leader, both by scale and efficiency and the service that we able to offer to students as a result of our PRISM operating system."