Goldman Sachs, Wellcome Trust and Greystar have completed their £2bn joint venture, which will form a major new player in the student accommodation sector.
The trio have created a company called VeroGroup which owns 54 assets across the UK with a combined 23,500 beds, as revealed by Estates Gazette last summer. Goldman owns a stake of close to 70% and Wellcome close to 30%, with Greystar having a minority investment.
The new company will have 600 employees with 80 to 100 being centrally located at the company’s office on Finsbury Circus, EC2, and the rest operational and located at VeroGroup’s assets. Around 140 employees have transferred from Wellcome’s iQ business and the remainder have been brought in from Prodigy Living, the Greystar-operated company which runs Goldman’s assets.
VeroGroup will be headed by managing director Ilya Blazic, former chief executive of iQ, and will have a shareholder board with representatives of Wellcome and Goldman and a management board, also with representatives of all stakeholders and to which new executives will be appointed.
Initially one brand will not be applied to the whole portfolio. This may be considered at a later date or two brands could be retained and applied to assets of different styles or quality.
Despite the heated student accommodation market, Vero will look to make new acquisitions in the UK, both in terms of individual assets and portfolios or platforms.
In the longer term, the company is likely to float, with Unite currently being the only large-scale student accommodation player in the listed sector, and it could become the first student accommodation REIT. As with previous Wellcome investments, including Deutsche Annington (now Vonovia), it could retain its ownership within a public vehicle and allow Goldman, a more opportunistic investor than Wellcome, to exit at an earlier stage.
Peter Pereira Gray, managing director of the investment division of Wellcome Trust, told Estates Gazette: “I would envisage Wellcome having a long-term investment in this sector. We think it has exciting dynamics, structural undersupply, strong demand and see those things continuing. We are going to build a best-in-class company focusing on delivering best practice, leveraging our technology and the resources of the sponsors.
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