Middle Eastern money backs €162m UK student housing deal

Private money from the Middle East has supported the acquisition of two portfolios of existing student accommodation and developments in the UK for £125 mln (€162 mln).

The transaction involved Arlington Investors, in partnership with Campus Living Villages, acquiring seven assets, with a total of 1,450 beds, in Birmingham, Cheltenham, Exeter and Gloucester, as well as a 490-bed development in Birmingham.

The vendors were UK residential specialists, Spectrum Housing Association and Sanctuary Group.

Arlington Investors is a Jersey-based company with a focus on investments in prime property and representing major family office investors from the Middle East. Headquartered in Australia, Campus Living Villages is an international provider of student housing, with a portfolio of owned and managed sites located predominantly on campuses at higher education institutions.

The London office of international law firm McGuireWoods represented Arlington Investors and Campus Living Villages.

Insurance lending
The law firm described the joint venture deal, which completed on 9 March 2016, as a significant acquisition in the student accommodation market in the UK, being one of the first insurance lending backed deals with a direct let portfolio. 'The finance and structure available for the deal will generate greater returns than those previously available in the market. This is a positive sign of a booming property market,' said Hed Amitai, a partner in the firm’s tax practice who led the McGuireWoods team in the deal.

This is the third major student housing purchase McGuireWoods has handled for Arlington Investors in the past three years. In 2014, we handled the £250 mln acquisition of the Ottoway student accommodation portfolio from the Opal group. In 2015, we assisted in the purchase and structuring of the Goldsmiths student accommodation portfolio from Goldsmiths University.'