Lone Star Funds is acquiring a £212m (€251m) UK purpose-built student accommodation (PBSA) portfolio from Unite Students.
An affiliate of Lone Star Real Estate Fund VII fund has agreed to acquire the portfolio of nine properties with a total of 3,656 beds located in Aberdeen, Leicester, Leeds, Nottingham and Sheffield.
Unite Students said the disposal is part of the group’s strategy to increase “alignment to high and mid-ranked universities and those properties with the strongest prospects for sustainable long-term rental growth”. The disposal will see the group fully exit the Aberdeen market.
Unite Students said the sale proceeds, amounting to £140m for its share of the assets, will be recycled into investment activity in its main markets, and used to satisfy the remaining redemption requests in the Unite UK Student Accommodation Fund.
Joe Lister, CEO of Unite Students, said: “These disposals increase the alignment of our portfolio to the strongest university cities and continues our disciplined approach to recycling capital.
“PBSA continues to attract institutional capital as the growing UK 18-year-old population and improving trends in international recruitment underpin demand for high-quality student accommodation.“
Lone Star Funds said the assets present an opportunity for value creation through targeted capital investment and operational enhancements.
Jérôme Foulon, global head of commercial real estate for Lone Star, said: “This transaction aligns with Lone Star’s global strategy of investing in resilient sectors of the housing market where we can leverage our expertise to unlock long-term value.
“We continue to see attractive opportunities in the UK’s PBSA sector, which benefits from the growing student population demand and a continued shortage of high-quality accommodation.”
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