LGIM makes first direct-let UK student housing acquisition

Legal & General Investment Management has made its debut in directly-let student accommodation with the acquisition of two UK assets for £122m (€142.7m).

LGIM, investing on behalf of its Legal & General Retirement Institutional (LGRI) business, said it has acquired the Aqua Portfolio from Global Student Accommodation (GSA) and launched the L&G Student Living Platform.

The acquired portfolio consists of two, direct-let purpose-built student accommodation (PBSA) assets: the 312-room Clifford House asset in Exeter and the 399-room Scotway House in Glasgow.

The new direct-let PBSA strategy will look to target operational, up and built PBSA units no older than five years old. With over 10 years in student accommodation since its 2011 debut, LGIM now manages more than £1.2bn in the student housing sector across equity and debt.  

LGIM said it aims to deploy over half a billion pounds of capital into the sector over the next two years, with the longer-term goal of growing the portfolio to over £1bn and directly managing around 5,000 beds across the UK.

Neil Dovey, the head of annuity transactions at LGIM said: “We’re excited to have made our first direct-let acquisition in the student accommodation space. These assets provide high quality PBSA accommodation, situated in locations benefiting from strong academic institutions and demand from students, looking for buildings designed to meet the requirements of modern university life.”

Adam Burney, the head of annuity build-to-rent (BTR) and PBSA at LGIM, said: “Investing in direct-let PBSA assets forms the next iteration of our living sector strategy. The sector has demonstrated its alignment to our strategic requirements, which includes a significant focus on ESG and provides diversification.

”Following the success and growth of our BTR platform, this strategy further supports the long-term investment goals of LGRI.” 

Andrew Kail, LGRI’s CEO, said: “Pension scheme capital is being put to positive use in the real economy – with tangible benefits across generations. These buildings provide students with quality accommodation, while the British economy as a whole should benefit from long-term investing in real assets. 

”We’re proud of how expertise from colleagues has unlocked these benefits for both the new generation as well as the long-term future of those looking to a sustainable pension.”

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