A UK fund manager has agreed a deal to buy a £232m portfolio of student accommodation assets from Fusion Students.
The 1,857-bedroom collection has been placed under offer by Arlington Advisors with a deal expected to complete by the beginning of the third quarter of the year.
Fusion appointed Knight Frank in March to find offers for the assets, known as the Stellar Portfolio.
The buildings are located across four Russell Group university cities: Newcastle, Nottingham [main picture], Cardiff and Bristol. Each site is within a 10-minute walk of a university.
Most of the assets completed in 2017 and have a gross income of roughly £16m per annum, representing a 5.4% net initial yield.
Arlington Advisors sources structures and manages more than 10,200 beds across 14 UK cities on behalf of Jersey-based wealth manager Arlington Investors, which was established in 2012 and represents family office investors in Europe and the Middle East. Arlington Investors is also the largest independent owner of off-campus student accommodation in the UK that is not tied to a single operator.
The UK-based company has been on a robust expansion drive in the student accommodation market in recent months. Earlier in the year it passed the 10,000-bed milestone after buying the operating portfolio of UK student accommodation provider Study Inn for £135m.
In May it embarked on a capital raise for its new £400m student accommodation fund, the Arlington Student Accommodation Fund, which it plans to seed with a portfolio of 8,000 beds owned by Arlington Investors.
The fund is targeted at UK-only student accommodation deals. It plans to add between 1,500 and 1,800 additional beds to the fund each year, equivalent to £150m of assets per annum.
Arlington Advisors’ rapid expansion was underscored by the hire of Graham Bloomfield as its investment director from financial advisory firm DWPF earlier this month, to lead its financial evaluation and debt financing of investment opportunities.
Arlington Advisors is led by chief executive George Shweiry and managing director Sean McKeown.
Jo Winchester, head of student accommodation at CBRE said: “Despite a slower than average first half of the year with some deals taking slightly longer to complete, there is currently £1bn of stock under offer as investors continue to show a healthy interest in prime student assets.
“We have also seen a renewed interest in non en-suite assets which offer investors value for money as well as the option for refurbishment. As we head into the second half of the year we anticipate continued demand from a broad base of investors.”
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