REAL ESTATE - UK student accommodation developer UNITE has secured planning permission for the £35m(€53m) second phase of the world’s tallest student accommodation block. The firm, which is 4% owned by Dutch pension fund ABP, will build the 37-storey block as part of an £80m project in Leeds, northern England.
Phase 1, which comprises 994 beds, will open this year. Construction on phase II, which will also include ground-floor retail space, is scheduled for completion in 2009.
UNITE says it will complete between 4—10 projects in the next few years – though none of them high-rise. "There are more projects in the pipeline but none of this size," said spokeswoman Amanda Williams.
Student accommodation has become – with nursing homes and other healthcare facilities – a target for pension funds moving into niche segments, not least because it offers investment characteristics – yields and low cyclicality – that are closer to commercial than residential (‘Back to School’, IPE, 12 November 2006).
UNITE has developed an approach closer to hospitality than residential, including the appointment last year of former Hilton European vice-president Tony Harris as chief financial officer in its efforts to rebrand itself as a "student hospitality" company.
In November the UK’s €38.5bn Universities Superannuation Scheme (USS) was among the institutional investors to invest in UNITE’s €764m student accommodation fund. USS committed £266m to the open-ended fund.