Five-asset PBSA portfolio hits the market for £84m

Harris Associates has been appointed to market a portfolio of five purpose-built student accommodation assets with a total of 795 beds for offers over £84m. The portfolio is held by 90 North Real Estate Partners and Rasameel Investment Company as part of the Academy Investment Fund. The owners are looking to sell the portfolio with refurbishment and rental reversion potential at a net initial yield of 6.37%. The portfolio, which is being marketed as “The Collection”, comprises the 219-bed Exeter One in Exeter; 187-bed Union in Leamington Spa; 108-bed Goods Corner in Edinburgh; 146-bed City Heights in Cardiff; and 135-bed Dover Street in Leicester. The joint venture acquired the Cardiff asset for £19.4m – a 5.75% net initial yield – in June 2022.  It bought Dover Street in Leicester for £24m, and Goods Corner in Edinburgh for £22m in 2020. The Union in Leamington Spa was acquired for £17.2m in 2017, according to Radius. It acquired Exeter One for £18.5m, also in 2017. Jamie Harris, head of student accommodation at Harris Associates, said: “The Collection offers a chance for investors to acquire a stable portfolio, producing steady rental yields in locations that rarely appear on the market.   “Several assets across the portfolio also have the potential for substantially increased rental incomes with some refurbishments and renovations. Over the past two-and-a-half years construction costs have increased by over 30%, making new developments challenging. “As such, the asking price for The Collection is far below replacement cost, providing a unique opportunity as rents at this level would not be viable in newly built PBSA.”