London Student Accommodation (LSAV), the 50-50 joint venture between Singapore sovereign wealth fund GIC and Unite Students has acquired two assets in London for £342m (€400m).

The properties in Wembley and Whitechapel were sold by the wider Unite group and take the gross value of LSAV’s portfolio to £1.68bn.

The investment comes soon after Unite and GIC announced they would extend their long-running joint venture by 10 years to 2032.

Unite will continue to operate the properties under its management agreement with LSAV.

The acquisition was financed with a £140m, eight-year, fixed-rate loan from investment manager Barings, which invested on behalf of two unnamed institutional investors.

The buildings offer 1,358 bed spaces, of which the majority are direct-let to students. The Wembley property, Arch View House, was completed for the 2020/21 academic year under a forward fund contract.

Combined, they had a gross asset value of £338m at the end of 2020 based on a stabilised net operating income of £14.2m for the 2020/21 academic year.

Richard Smith, Unite Students Chief Executive, said: “This follows our announcement of LSAV’s 10-year extension in May and reflects a strong endorsement of both our sector-leading operating platform and the purpose-built student accommodation sector from GIC.

“The transaction means we have now delivered over £260m of disposals in the year to date on a Unite share basis. This provides us with significant capacity to reinvest in our development pipeline, including opportunities in London.”

The loan follows a £124m facility that was fully repaid to Barings last year.

Chris Bates, head of Europe real estate debt origination at Barings, said: “These modern properties are finished to a very high standard and are well located to meet the demands of students attending London’s numerous, world-renowned educational institutions.

“We look forward to working with Unite Students and GIC through their London Student Accommodation Venture and supporting them over the coming years.

“This new facility extends our long-standing relationship with Unite Students and underlines our commitment and conviction in the outlook for UK student accommodation sector, which continues to benefit from strong underlying demographic trends, despite the challenges faced during the pandemic.”

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