US privately-held developer-investor Hines has launched its first move into the student housing market globally with the acquisition of six prime development sites in the UK from McLaren Property, a UK developer.
The acquisition was made on behalf of a new investment vehicle owned by a group of German pension funds and managed by Hines and involves a forward-funding agreement for the portfolio valued at £150 mln (€191 mln).
This is the first collaboration between the two companies, with Hines securing the forward funding and assuming asset management responsibility upon completion, and McLaren acting as developer.
Alex Knapp, Hines Managing Director, said: 'We have been waiting for the right opportunity to enter the student housing market. The combination of McLaren’s strong track record and the rare opportunity to secure a portfolio comprising assets in such prime locations make this a perfect entry for us into this exciting market sector. We look forward to working with McLaren to ensure the success of this cornerstone acquisition.'
The acquisition forms a key part of Hines’s current strategy of diversifying into new asset classes to build on its existing, established portfolio of office, retail, industrial and residential investments. The firm expects to further strengthen its student housing platform, both in the UK and elsewhere, this year.
The portfolio comprises six development sites in Cambridge, Oxford, Kingston, Aberdeen and two locations in Brighton, and will deliver more than 1,100 beds in total. Planning consent to develop purpose-built student accommodation has been secured on four sites, with approval on the remaining two expected later this year. Construction work is expected to begin imminently, with the developments expected to complete in 2017 and 2018.
Lars Huber, Co-CEO for Hines Europe, said the firm is embarking on a strategy of asset diversification across the UK and Europe. 'We are delighted to make Hines’ first venture into student housing globally. The fundamentals of the UK market are very strong with growing student-population numbers driven by the strength and reputation of UK universities. We hope to further our presence in this burgeoning market, both in the UK and elsewhere, with further announcements expected soon.'
John Gatley, managing director for McLaren Property, said he hoped to continue to develop further opportunities with Hines. 'The student accommodation sector has performed exceptionally well, and we expect it to continue to do so. This transaction represents the latest tranche of our total development portfolio of circa 4,000 units, and we remain active in securing further developments and investment opportunities in this sector.'
McLaren were represented by Tudor Toone and Taylor Wessing in the transaction. Savills, Herbert Smith Freehills and Dechert acted for Hines.
Hines is a privately owned global real estate investment firm with $89.1 bn ($77.8 bn) of assets under management, including $42.5 bn for which Hines provides fiduciary investment management services, and $46.6 bn for which Hines provides third-party property-level services. The firm has 109 developments currently underway around the world.
