Legal & General has completed a deal to forward-fund a Greenwich student accommodation scheme being developed by McLaren Property.
The investment and development arm of the McLaren group has secured £43.2m from the fund manager to bring forward the scheme, which it bought from Development Securities and Cathedral Group.
The 368-bed development has been prelet to the University of Greenwich on a 35-year lease, at a rent of just over £2m pa, which is reviewed annually with RPI uplifts.
It is located adjacent to Greenwich DLR station and will include 6,000 sq ft of commercial space alongside the student housing. Completion will take place in September 2014, ready for the start of the academic year.
John Gatley, McLaren Property’s managing director, said: “We are pleased to have agreed this deal with Legal & General, and will be pursuing strategic opportunities to reinvest the equity it has realised into other potential student accommodation developments.
“The sector continues to outperform the market as an investment class, delivering strong returns and rental growth.”
Gordon Aitchison, L&G’s director of transactions and development, said: “This is our second major funding of student accommodation in London this year, following the successful completion of Griffon Studios in Battersea, which was prelet to Imperial College on a similar long-dated, index-linked lease, that time with 45 years in place.
“These fundings provide universities with a one-stop shop to create much sought after, high-quality student accommodation, and demonstrate our growing appetite to explore alternative sectors for attractive investment opportunities.”
bridget.oconnell@estatesgazette.com
