Legal & General Property has agreed a £15.7m deal to forward fund the development of an 193-bed student accommodation scheme prelet to Canterbury Christ Church University.
The deal, which reflects a yield of 5.14% after purchase costs, is L&G’s eighth major university-backed acquisition so far and its fourth in 2013.
The scheme comprises 193 en-suite rooms arranged over two blocks and will be delivered by September 2015, in time for the start of the academic year. It will be let to the University on a 25-year lease, with annual RPI-linked uplifts.
L&G has acquired the site on a freehold basis.
Other recent transactions this year have included those backed by Newcastle University, Aberystwyth University and University of the Arts London, with Legal & General having committed a total of more than £750m to the student accommodation sector in the last few years, including two lending deals.
Derek Gilby, senior fund manager at Legal & General Property, said: “LGP continues to be one of the most active investors in the student accommodation market, seeking out rare off-market opportunities to invest in high quality schemes that are backed by A rated university covenants on long lease terms.
“Furthermore, the property’s central location, adjacent to CCCU’s new library and student services facility, provides security with regard to the long-term income and underlying value of the property.”
bridget.o’connell@estatesgazette.com
