Joint venture acquires PBSA portfolio for £280m

Joint venture acquires PBSA portfolio for £280m

Arlington Advisors – on behalf of Arlington Investors – has acquired a portfolio of 2,458 beds of purpose-built student accommodation (PBSA) for £280m.

The investment manager’s acquisition is part of a joint venture with Equitix, a UK-based investor and fund manager of infrastructure assets.

The transaction was financed by £200m of senior debt, which was advanced by a single institutional investor with a 44-year maturity.

The purchase combines the Stellar Portfolio from Fusion Students and Merlin Heights in Leicester from a private investor.

The Stellar Portfolio features 1,857 beds across four PBSA assets in Newcastle, Nottingham, Cardiff (pictured above) and Bristol and was sold for more than the £232m asking price.

Talbot House in Nottingham, part of the Stellar Portfolio

Merlin Heights comprises 601 beds developed by Watkin Jones PLC in 2016 and is currently operated by Fresh Student Living.

The deal brings the total number of PBSA beds under Arlington’s management to 12,700.

“This acquisition builds on Arlington’s track record within the student accommodation asset class, which continues to offer attractive investment opportunities for our investors,” said Sean McKeown, managing director at Arlington Advisors.

“We remain committed to expanding our activity within the sector with a strong pipeline already in place for 2019, where we expect to continue acquiring high-quality assets in premier city locations.”

The sale of the Stellar Portfolio will allow Fusion Students to reinvest the capital into its expansion plans in the UK and overseas.

“Our focus is on delivering memorable and rewarding university experiences for students in newly built buildings that are thoughtfully designed, conveniently located, featuring experiential events and much-desired facilities,” said Nigel Henry, co-founder and director of Fusion Students.

Knight Frank’s student property team acted for Fusion Students, while Arlington and Equitix were jointly advised by Osborne Clarke, Memery Crystal, Grant Thornton and TradeRisks.

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