An investment management company in the UK has announced it is overseeing the completion of a new 328-bedroom accommodation complex for students in London.
LaSalle Investment Management is buying the scheme for UK£32 million on behalf of an unnamed institutional client. It reported that the purchase price reflects a net initial yield of 6.27%.
The scheme, designed by TP Bennett and built by Watkin Jones, will total 258 en-suite cluster bedrooms and 70 studio units along with approximately 17,000 square feet of commercial space. Known as The Quadrant, it will be based in Stockwell in south London and ready for the 2013/14 academic year.
“The University of the Arts, London has taken a 21 year lease with a break at year 15 across all the en-suite cluster bedrooms, whilst the remaining studios will be leased to Watkin Jones on similar terms,” stated LaSalle. The University of the Arts, London comprises six separate arts-focused colleges and has a dynamic international unit (but it is not the investor).
The student accommodation will be managed by Fresh Student Living. The complex also includes commercial space which will provide affordable studios for fine artists. According to LaSalle, “The net income for the property will be £2,138,242 per annum and will be subject to fixed annual uplifts at 2.50%.”
John Yeend, Director of LaSalle, said: “This funding demonstrates our interest in the student sector, which can provide a secure, predictable income stream for our investors and is underpinned by strong occupier demand and a shortage of quality new accommodation.”
