Terrace Hills sells student site in Southampton

Terrace Hill's joint venture with Osborne has exchanged conditional contracts with Legal & General Property (LGP) for the forward funding and sale of its 1,104 unit student accommodation development in Southampton city centre. Further details will be provided when the transaction has completed, the UK property developer-investor added.

The scheme is well located in the city centre and is pre-let in its entirety to the University of Southampton on a 38-year lease. Construction is scheduled for completion in summer 2014.

The property will be arranged over three towers, ranging from eight to 16 storeys high, positioned around a central piazza. In addition to the student accommodation, the scheme includes a shop, café, gym and learning centre at ground level.

Gordon Aitchison, director of Investment and development at LGP, said the acquisition is 'in line with the fund's objective to acquire long let, index-linked assets with investment grade covenants. 'This transaction provides us with a secure long term income stream that is hedged against inflation. Furthermore, representing our third major funding of student accommodation this year, it demonstrates our growing appetite to look to alternative sectors as attractive investment opportunities and the increasing role that the private sector will play in funding critical social infrastructure.'

The joint venture was advised by DTZ and Strutt & Parker. Legal & General Property was advised by Knight Frank.