Development Securities has acquired its first building in the student housing sector through Accrue Manchester, its joint venture with Accrue Student Housing.
Ladybarn House has been purchased on a long lease from Manchester University for around £7m – a 6.25% yield. The Cooperative Bank provided £4.55m of debt.
It is an established hall of residence on Fallowfield Campus, the main residential campus of the University of Manchester.
Accrue Manchester will undertake a rolling refurbishment to upgrade kitchens and bathrooms, which is expected to increase the yield to 8%. Ladybarn House was fully let by Accrue Manchester between exchange and completion of the transaction.
This deal is part of Development Securities’ strategy to explore additional asset classes that hold opportunities to create value.
Matthew Weiner, executive director of Development Securities, said: “The shortage of quality student housing has been widely publicised recently, and leading universities like Manchester have been identified as ‘first-class’ investment. We believe there are significant opportunities for us to add value to this new asset, particularly working closely with Accrue, an experienced partner.”
annabel.dixon@estatesgazette.com
