Student Roost buys fifth Nottingham building
Student Roost has bought a new 703-bed building in Nottingham, taking its bed count in the city to over 3,100 …
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Unite announces £342 million disposal
Unite Students, the UK’s leading owner, manager, and developer of student accommodation, today announces the disposal of two London properties to its London Student Accommodation joint venture (‘LSAV’) with GIC for £342 million (Unite share £171 million), in line with book values and reflecting an average net initial yield of 4.0%.
The properties are located in Wembley and Whitechapel and offer 1,358 bed spaces, of which the majority are direct-let to students. The Wembley property, Arch View House, was completed for the 2020/21 academic year under a forward fund contract. The two properties had a gross asset value of £338 million as at 31 December 2020 and are valued based on stabilised net operating income of £14.2 million for the 2020/21 academic year. The disposal to LSAV follows the extension of LSAV to 2032 announced on 4 May 2021.
LSAV will fund the acquisition through £208 million of equity from Unite and GIC and a £140 million 8-year loan facility provided by Barings. Upon completion, the Group’s see-through LTV reduces to 30% on a pro forma basis after also adjusting for the £90 million of disposals announced on 30 March 2021. The net disposal proceeds will initially be used to repay Group debt ahead of reinvestment into the development pipeline and further growth opportunities over time. The transaction will result in a small dilution to 2021 EPRA earnings of 0.4 pence per share. Accordingly, the Group retains its EPRA EPS guidance of 27-30 pence for 2021 …
Students call for greater action on climate change
STUDENTS CALL FOR STRONGER ACTION ON CLIMATE CHANGE – INCLUDING CAMPUS BANS ON SINGLE-USE PLASTICS, FINES FOR PEERS AND ANNUAL LIMITS ON FLIGHTS
- New research shows that students are more concerned about climate change than any other issue in 2021 – including COVID-19
- Just 18% are happy with the UK government’s approach to the issue, despite pledge to set target to reduce emissions by 78% by 2035 into law earlier this year
- Students are calling for strong action – a third would now like to see peers fined by universities for failing to live in an environmentally-friendly way on campus
- Students also taking bold action in day-to-day life – 88% say they now limit air travel annually for environmental reasons
- Concerns are also impacting career choices – a fifth would turn down a job with high salary if company’s climate change reputation was poor …
Calico Liverpool student scheme sold to Dubai investor
Niveda Group, a London-based developer and asset manager, has offloaded the 735-bedroom block on Liverpool’s Norton Street to an unnamed private buyer for £61.5m.
The £38m project completed in October 2019 and comprises 220,000 sq ft of purpose-built student accommodation plus social hub areas and a retail area spanning two blocks. The bedrooms are arranged into five- and six-bed cluster flats and there are also 101 self-contained studios.
Calico was designed by architecture studios KKA and, later, Falconer Chester Hall and replaces a series of now-demolished commercial buildings and a former car park close to Liverpool city centre. The main contractor was Create Construction and Fresh Student Living is the property manager …
UK’s regional cities record strong PBSA supply growth
New research by the UK’s largest student accommodation search platform – StuRents – shows that Liverpool’s Purpose-Built Student Accommodation (PBSA) bed supply has increased by 1,544 in the 2021-22 academic year to date – a 5.8% uplift year-on- year. The North West has also seen Manchester attract 1,095 beds.
Swansea, Wales has also seen a regional uplift by 1,481 beds, Nottingham in the East Midlands by 1,362 beds, Lincoln by 1,176 beds and Sheffield in South Yorkshire by 1,351 beds.
Following a difficult year for the student accommodation sector – with travel and teaching restrictions imposed by the Covid-19 pandemic impacting student attendance, the pipeline in the UK shows the PBSA sector continues to attract investment. While London maintains the largest pipeline of 14,235 student beds, the pipeline for Nottingham is 7,827, Bristol is 6,499, Leeds is 5,943 and Manchester is 5,578. Figures show the healthy pipelines – and ensures the PBSA offering in regional hubs continues to grow …
Watkin Jones sells Leicester student scheme to DFI
Watkin Jones has sold a 462-bed PBSA asset in Leicester to Deutsche Finance International (DFI) for £35.6m.
The off-market acquisition by DFI is a forward commitment to The Tannery, which Watkin Jones is set to complete ahead of the 2021/22 academic year.
The building comprises 415 en-suite rooms and 47 studios, as well amenities including a cinema room, games room, fitness studio, lounges and study areas. It will be operated by Watkin Jones’s asset management business Fresh …
Lone Star makes PBSA debut with £315m portfolio buy
US investor Lone Star has made its first play in the UK PBSA sector with the acquisition of a 2,621-bed portfolio …
24,800 new student beds enter UK market as Covid-19 fails to silence ‘the call of the campus’
New research from Cushman & Wakefield reveals the purpose-built student accommodation (PBSA) market has been remarkably resilient over the last year despite the shadow of Covid-19, as the number of new beds increases and the development pipeline remains strong.
Student accommodation providers across the sector have wrestled with the challenges of campus closures and adaptation and, throughout this whole period, supporting those who couldn’t go home or have chosen to return to campus. The impact of Covid-19 on demand meant that 2020/21 saw the greatest amount of rental discounting in the history of the sector with 25 per cent of all direct let schemes offering some form of a reduction.
The healthy dose of new student beds entering the market for the 2020/21 academic year (+24,800) represents a net increase of 21,000 beds. Some 3,800 beds have left the market, improving the overall quality of stock. Quality accommodation continues to be on students’ minds, demonstrated in the price of a new university en-suite bed increasing by 17 per cent annually compared to 2019/20, although this again raises questions about overall affordability …
Planning Approval for Nottingham Development – Unite
Unite Students, the UK’s leading owner, manager and developer of student accommodation, has received resolution to grant planning permission for its 700-bed student accommodation development at Derby Road in Nottingham.
The direct-let development, which is located adjacent to the University of Nottingham campus, will open in time for the 2023/24 academic year. We have been successful in securing additional beds for the scheme through the planning process, resulting in total development costs of £57 million. The scheme will deliver a development yield in line with the Company’s stated targets.
The development will target a BREEAM Excellent rating and net zero carbon in operations through optimised design, integration of solar panels at roof level and an all-electric heating solution, including high efficiency air-source heat pumps. The development will also deliver a substantial biodiversity improvement, through opening and improving access to the River Leen …
Final Results – Unite
Richard Smith, Chief Executive of Unite Students, commented:
“Despite the challenges of the Covid-19 pandemic, I am proud that Unite has emerged from a tough year showing our operational resilience and building on our commitment to doing the right thing to support students. We were the first PBSA provider to forgo rents during the first national lockdown and to date have provided rental discounts to students totalling over £100 million alongside a number of other supporting measures. In particular, I would like to thank our teams for their dedication over the past year. The pandemic has also showcased the resilience of our best-in-class operating platform, which successfully delivered the integration of Liberty Living’s 24,000-bed portfolio during the year.
The outlook for the business and the UK Higher Education sector is strong. A record share of school leavers are choosing to attend University, demographic growth is significant over the next decade and international student numbers continue to increase. We expect strong demand for the 2021/22 academic year, supporting a return to full occupancy and 2-3% rental growth. Together with our development and University partnership pipeline of c.4,000 beds, this provides high visibility over a rapid recovery in earnings as market conditions stabilise.
While Covid-19 provides some ongoing uncertainty, we remain confident in the medium and long-term outlook for the business thanks to our alignment to the strongest Universities as well as the significant growth opportunities from new developments, University Partnerships and by attracting more of the 955,000 students living in Houses of Multiple Occupancy. As a result, the Board is recommending a final dividend of 12.75p.” …