Scottish Widows Investment Partnership Property Trust has bought a 374-bed student accommodation scheme in Oxford, for around £30m.
The price paid to Gatehouse Bank for the Slade Park building reflected a yield of around 6%.
There is a nomination agreement with Oxford Brookes University expiring in 2034, the income underwrite for which expires in 2015.
Kerri Hunter, deputy fund manager of SWIPPT, said: “We have a number of holdings in the alternative sector but this is our first acquisition of student accommodation. We’re delighted to have secured this prime property which has strong fundamentals and is located in the iconic university city of Oxford.
“We’re attracted to the alternative sector for its long income and income growth characteristics and the addition of this asset will complement our existing hotel, hospital and care home assets.”
Matt Dodds, asset manager at Gatehouse Bank, said: “The asset has reached the end of its originally envisaged investment horizon and has provided excellent returns to investors given the strong fundamentals for this type of asset and opportunity for rental growth under the nominations agreement.”
Stuart Osborn, senior surveyor in Jones Lang LaSalle’s student housing team, which advised the vendor, said: “This deal demonstrates an increasing intent and desire for traditional institutions to grow into the student accommodation sector without the need for long-dated income.”
CBRE acted for the buyer.
