UK - Fund manager Rockspring has acquired a new-build student-housing scheme for £34m (€38.9m) for an unidentified pension fund.

It acquired the asset from Quintain, which divested the halls to reduce its corporate debt.

The fully let, 232-room central London scheme will meet demand from students at a number of nearby universities. A ground-floor retail component is under offer.

The Rockspring dealmakers would not comment beyond a prepared statement, but a spokeswoman for the firm said: "The supply-and-demand equation is out of kilter in student accommodation, which supports capital values. At the same time, it's cash-generative, and it comes with a high occupancy rate."

Today's announcement represents AUM €7.5bn Rockspring's second acquisition in the subsector and its first for a pension fund mandate.

It acquired an Edinburgh scheme for £14.2m last October for its UK Value fund.

The spokeswoman pointed out that purpose-built assets remained relatively rare in the student accommodation market, although UPP's business model effectively replicates a build-operate-transfer infrastructure model in partnership with UK universities.

Rockspring's spokeswoman pointed to Land Securities' recent acquisition of its first student accommodation asset as proof of increased institutional interest in the sub-sector.

However, she declined to comment on whether increased competition could push up prices to the point where yields became significantly less attractive.

The fund manager said it continued to view countercyclical higher-education residential assets as "a relatively stable and secure market", with valuations underpinned by fundamentals and a significant paucity of supply, especially in the capital.