Apache, LetterOne bag €350m in UK student digs

UK investment manager Apache Capital Partners and privately owned investor LetterOne Treasury Services have acquired developer McLaren's 1,092-beds portfolio in six transactions worth a total £253 mln (€350 mln).

Investment vehicle LetterOne, which was co-founded by Russian oligarchs Mikhail Fridman, German Khan and Alexei Kuzmichev, has exchanged contracts to buy McLaren Property’s Paris Gardens student residence as well as the Union development portfolio for a total of £140 mln.

Completed in 2013, Paris Gardens is a central London student residence comprising 9 and 13 storey-towers which has enjoyed 100% occupancy across its 253 student bedrooms in the first two academic years.

LetterOne has also forward committed to acquire the Union Portfolio comprising four student accommodation developments with a combined 839 beds located in four UK university cities. The developments are Twerton Mill (Bath), Hallfield Road (York), Elliott House (Edinburgh) and 112-113 Lewes Road (Brighton).

LetterOne Treasury Services will finalise the acquisition of the developments upon delivery in July this year with the exception of York which completes in 2016, the company said. The Luxembourg-based investor is already under offer to acquire the Pure student housing portfolio for £535 mln from the Carlyle Group.

Apache Capital Partners
Separately, UK investment manager Apache Capital Partners has acquired the remaining stake it did not already own in the Paul Street development in Shoreditch. Apache Capital is investing £109 mln in the London project, which is due for completion in July. It will provide 456 bedrooms with communal areas, including a gymnasium and resident cinema.

Tudor Toone advised McLaren exclusively on all six transactions.

'By working closely with Apache Capital Partners and LetterOne Treasury Services, it has enabled us to sell over £250 mln of super prime student accommodation developments allowing us to concentrate on delivery of our future pipeline of a further 2,000 beds in key locations,' commented John Gatley, managing director of McLaren Property.

McLaren has retained eight student schemes in its pipeline.

Richard Jackson, co-founder and partner of Apache Capital Partners, added: 'Apache has enjoyed a successful partnership with McLaren on Paul Street and Paris Gardens which have furthered our strategy of investing in social infrastructure projects, a platform which now comprises £300 mln in value.'