Unite Students has entered an option to buy an 800-bed development scheme in central Glasgow.
The student block, which is subject to planning, has a total development cost of £95m and is expected to deliver a yield on cost of around 7.5%.
Planning approval is targeted during H1 2024, enabling delivery for the 2026/27 academic year. The group expects to fund the project from capital recycling through disposals.
Michael Burt, Unite’s investment director, said: “Our latest development will create new supply of high-quality, affordable student accommodation in Glasgow to support the continued growth of our university partners.”
The deal will increase Unite’s portfolio in the city to 3,000 beds. Unite said it continued to make good progress on the delivery of its committed development pipeline, with Morriss House in Nottingham reaching practical completion in August.
Work has also started on-site at its Temple Quarter development in Bristol, and the planning process for Meridian Square in Stratford is progressing, with approval targeted in Q4 2023.
Burt added: “Our development pipeline now totals 5,600 beds in the strongest university cities, as we work to address the urgent need for new student housing at a time when the private rental sector is in retreat.”
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