Brookfield has been selected as the preferred party to buy Curlew Capital’s CBRE Global Investment Partners-backed UK student accommodation venture for around £520m – a circa 5.5% yield.
Brookfield fought off competition from a variety of international investors, including Singaporean group Capital Land, for the UK student accommodation opportunity.
The portfolio is largely regional and includes 15 assets, comprising 5,407 beds across 12 cities including London, Birmingham, Sheffield and Bath.
If a deal concludes it will be the second largest UK portfolio investment for Brookfield this year. Last month it also placed Oaktree Capital Management’s serviced apartment business SACO under offer for around £430m.
Curlew, which is led by former Teesland chief executive and Valad Europe director Paul Oliver, established CST only three years ago and has quickly built up a large portfolio.
Proceeds from the sale will be put towards the CBRE GIP in-house funds and global clients that backed it. Brookfield has been targeting aggressive growth in the UK student housing sector. It recently acquired 13 properties from Unite on behalf of one of its managed funds in a £295m deal.
The Curlew portfolio was amassed by forward-funding developments including a 412-bed block on Liverpool’s Lime Street, which is under construction. All of the assets are recently completed or under development and the portfolio is considered of high quality.
The portfolio is branded as and operated by Fresh Student Living, owned by Watkin Jones Group, which itself developed much of the portfolio. Fresh would not be part of any sale.
According to CBRE, total student accommodation transactions in the UK so far this year total £1.6bn and volumes are expected to exceed last year’s figure of £3.5bn.
James Pullan, head of student property at Knight Frank, said: “2017 has been a year of consolidation and economies of scale in the UK student market.
“We have seen key investors seeking to drive efficiency through quantum and we anticipate this trend to continue into the new year.
“This year has seen more than 70 schemes delivered, comprising in excess of 20,000 student bedrooms.
“Occupancy across the UK remains high and demand from global capital chasing well-placed student assets is strong.
“Student accommodation is seen as the Cinderella sector in an uncertain world, as it continues to provide a stable income stream underpinned by the UK’s world class education system.”
LetterOne is also currently selling its student accommodation business, which is valued at around £800m.
The company backed by Russian billionaire Mikhail Fridman has appointed JLL to market the 10-asset, 3,600 bed collection.
Savills is acting on behalf of Curlew Capital.
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