Malaysia’s civil service pension fund Kumpulan Wang Persaraan (KWAP) has bought The Mill House in Edinburgh and 800 Bristol Road in Birmingham for a combined £39.8m, in its first PBSA acquisition.
KWAP partnered with 90 North Real Estate Partners on buying the assets, which in total provide 360 beds, from IP Investment Management and Maven Capital Partners.
Both assets are fully operational and offer a day-one running yield. The Mill House, at 396-400 Gorgie Road, was sold for £25.1m – £978,000 per bed – which represented a net initial yield of 5.84%.
It is a 257-bed student accommodation asset located west of the Edinburgh city centre between Edinburgh University and Edinburgh Napier University. The building comprises 227 en-suite clusters, 30 studios, and one ground-floor retail unit. The property is managed by Fresh Student Living.
The 800 Bristol Road property, a 103-bed block in Selly Oak, was sold for £14.6m, or £1,419,000 per bed, which reflected a net initial yield of 5.69%. It is located within walking distance of the University of Birmingham. The property is managed by Collegiate AC. Both assets are 100% prelet for the 2018-19 academic year.
Dato’ Wan Kamaruzaman Bin Wan Ahmad, chief executive officer of KWAP, said: “I am excited by this opportunity to invest in the UK’s student accommodation sector. The UK is a global leader in higher education, attracting students from Malaysia and around the world.
“Acquiring these assets from IPIM and Maven meets KWAP real estate investment objectives for targeting strategic, diversified portfolios in foreign markets with a focus on revenue-generating portfolios.”
Philip Churchill, founder and managing Partner at 90 North, said: “The two properties forming part of this deal are low-risk, incoming-generating assets that have been developed by the current owner IPIM and the asset manager, Maven.”
Selina Williams, executive director at IP Investment Management, added that the business “will continue to work with Maven to develop UK PBSA schemes following this successful exit of our first developments together”.
Bidwells acted for the vendor; Robert Irving Burns and MacLaren & Partners acted for the buyer.
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