LaSalle Investment Management has outlined its commitment to snapping up and funding student accommodation schemes with its latest purchase from Watkin Jones.
The company completed a deal this week to purchase and fund Watkin Jones’ 328-bedroom Quadrant student accommodation scheme in Stockwell, south London, for £32m, reflecting a 6.27% yield.
Some 258 of the bedrooms will be let for 21 years to the University of the Arts. The remainder will be let to Watkin Jones, which will be operated by Fresh Student Living, and 17,000 sq ft of commercial space will be let to Acme for use by artists. All rents at the TP Bennett-designed scheme are subject to a 2.5% annual increase.
John Yeend, LIM director, said: “We see buying new student housing as part of our wider strategy of buying into index-linked leases. We have been buying on behalf of UK funds but are now also looking to attract international investors. We believe they will be very keen on the sector.”
Over the past 12 months LIM has invested £95m in the sector. The latest acquisition follows deals to fund and buy a scheme in Cambridge, and the purchase of a scheme in Newcastle.
Yeend added that LIM is eyeing around six sites and intends to make more buys in the sector in 2012. It is targeting London and red-brick university towns.
Lawson & Partners advised LIM; JLL represented Watkin Jones.
Joanna.bourke@estatesgazette.com
