Student housing specialist UNITE Group has set up its second joint venture with Lehman Brothers for the development of a student village in Leeds.
The joint venture will develop and operate a 968-bed student village in Leeds city centre on land valued at £3.7m, with an end value of £43.2m.
The joint venture will be 51%-owned by UNITE and 49%-owned by Lehman Brothers.
For an initial five years, both parties will have equal voting rights and board representation.
UNITE anticipates reaching a rent roll of £3.9m pa, which – after costs – will reflect a yield of 6.9%.
UNITE will also retain responsibility for the development and subsequent management of the property.
It will also receive a “promote fee” if, on the termination of the joint venture, the actual returns achieved exceed targeted returns.
Senior debt is being provided by Fortis Bank.
Completion is anticipated in August 2006.
Group finance director Mark Allan said: “This joint venture demonstrates the strength of our relationship with Lehman Brothers and the successes of our first joint venture in Sheffield, which will open in September this year.
“Leeds is an important market for UNITE and developing a further 968 beds in the city underlines our confidence in the strength of the local market and our long term commitment to the Universities and Colleges in Leeds.”
References: EGi News 08/08/05
