Goldman Sachs and Wellcome Trust’s iQ Student Accommodation has bought Pure Student Living from LetterOne for £870m.
The process generated 11 strong bids that saw the deal done at a price almost 10% higher than expected.
IQ fought off competition from Urbanest with Unite, Europa Capital, and PSP with Greystar.
The price paid reflects a yield just above 4%.
Exchange and completion were undertaken simultaneously today, having initially expected to not reach conclusion until the new year.
The portfolio comprises 3,644 rooms across 11 sites in London, Edinburgh, York, Bath and Brighton. The bulk of the portfolio was bought from Carlyle Group by LetterOne in 2015.
The sites will be fully integrated and rebranded as iQ in spring 2018.
The deal takes iQ’s portfolio to 28,000 rooms in 66 locations in the UK, making it the second largest owner of student accommodation in the UK with a portfolio of £3.2bn.
The scale of the portfolio is expected to see Goldman and Wellcome consider a public markets exit in 2018.
Rob Roger, chief executive of iQ, said: “The opportunity to acquire Pure is part of our strategy to grow our experience-driven business and we look forward to fully integrating the new sites over the coming months.”
Nitin Bhandari, head of direct investments for LetterOne said: “We are proud to have assembled a portfolio of award winning properties and to have integrated them into a leading and highly profitable student accommodation business with a core focus on our customers – the students and education providers. Over the last two and a half years we have increased the efficiency of business and added new revenue streams.”
LetterOne was advised on the sale by JLL and EY. IQ Student was advised by Knight Frank and KPMG.
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