Avenue Capital Group has confirmed its purchase of a £100m student housing chunk from the collapsed Opal Property Group.
As revealed by Estates Gazette in July, the New York-based investor has bought 1,800 UK beds from administrator KPMG. A deal of close to £100m is believed to have been agreed.
The beds make up the bulk of a 2,239-bed portfolio that Savills was appointed to sell by KPMG in April, a month after lender Lloyds Banking Group pulled the plug.
Liverpool Hope university has bought the remainder of the portfolio – the 443-bed block Aigburth Park block in Liverpool.
Stuart Wall’s Opal, which was one of the UK’s largest student accommodation providers, collapsed after failing to agree a refinancing deal for a near £900m debt with several lenders ahead of a 1 March deadline.
Richard Furst, senior portfolio manager of the Avenue Europe Strategy, said: “These properties will serve as the foundation of a broader investment that we intend to make in the UK student accommodation market over the long-term.”
The deal marks Avenue Capital Group’s UK debut in the student housing market. It is one of a number of US parties trying to buy Opal assets.
South Carolina-based Greystar Student Living has bought a £300m Opal package. There are now around 10,000 Opal beds left for sale.
Rob Croxen, joint administrator and partner at KPMG, said: “Following a period of stabilised trading, we are delighted to announce the sale of these properties to Avenue Capital. The sale ensures the continuity of high levels of service provided to students.”
James Hanmer of the Savills Student Investment team said: “The sale provided a rare opportunity to secure a trading portfolio of scale in established UK university cities. There was strong competition from both existing student investors and new entrants to the market, especially US investment houses, underlining the demand for operational real estate in a sector with proven investment drivers. The student accommodation market has never been as liquid and there remains enormous interest in the sector.”
