McLaren Property has exchanged contracts on the sale of its standing and under construction student accommodation portfolio in a trio of deals totalling £252.6m.
LetterOne has bought McLaren’s 13-storey Paris Gardens, SE1 development for £61m. The 253-bed development completed in July 2013.
The Russian billionaire-backed LetterOne – which will this week close its £535m acquisition of Carlyle’s Pure Student Living business – has also forward purchased a four-asset portfolio from McLaren, covering developments in Bath, Edinburgh, Brighton and York, for £83m.
The combined acquisitions mean LetterOne will have closed almost £700m of student deals in the first quarter of 2015 and is well on the way to building up a £1bn portfolio with further deals in the pipeline.
Separately, McLaren has sold 12-25 Paul Street, in Shoreditch, EC2, to Apache Capital for close to £108.6m. Apache has exchanged contracts on the forward purchase of the 456-bed development and the deal will complete in July in line with the anticipated completion of construction.
McLaren, which was advised on the sales by Tudor Toone, has now sold all of its completed and under-construction student accommodation schemes as it looks to capitalise on the robust investor demand for the sector.
But it has retained eight student pipeline schemes where development has yet to start, two of which have planning consent and six of which either have applications pending or have yet to be submitted.
Three of the four under-construction schemes bought by LetterOne will complete later this year with the fourth – a 326-bed scheme on Hallfield Road in York – due for completion in September 2016.
The Bath scheme, at Twerton Mill, comprises 330 student beds, the Edinburgh scheme at Elliot House totals 138 beds and the Brighton scheme at 112-113 Lewes Road comprises 45 beds.
LetterOne has teamed up with CRM to operate its rapidly burgeoning portfolio.
The flurry of deals will set a new record for activity in the student accommodation sector.
According to Savills, £2.5bn of student assets traded in the whole of 2014. But that figure could be matched in just the first three months of this year if other significant transactions, such as CPPIB’s £1.1bn purchase of Brandeuax’s Liberty Living portfolio, complete this month.
