Apache Capital Partners has successfully disposed of its prime 251-bed purpose-built student accommodation property, Brunswick House, in Cambridge, to Cambridge County Council for a total consideration of €43m (£38m), reflecting a net initial yield of 4.76%, a record in the UK for a direct-let asset student accommodation outside London/the M25. This exit yield compares very favourably to the acquisition yield of 6.15% paid by Apache Capital in May 2013, and generates an attractive geared IRR.
Brunswick House, completed in July 2012 and comprising 231 en-suite cluster flats and 20 self-contained studio flats, is less than a 10 minute walk to Anglia Ruskin University’s Cambridge campus and opposite Compass House, part of Anglia Ruskin University (Computer Sciences). The city centre is within a short walk of Brunswick House, which on the northern side of Newmarket Road, close to its junction with the A603/A1134 inner ring road. The direct let property, which was 100% let for 2017/18 academic year, has a large common room and laundry room at ground floor level, as well as comprehensive bicycle storage at basement level and within the enclosed, landscaped courtyard.
Ben Pile, Investment Director of Apache Capital Partners, said: “This successful sale underlines our decision to acquire this prime asset in central Cambridge, located close to the main campus of Anglia Ruskin University. The acquisition of a direct-let student property by an institutional-style investor emphasises the strength and quality of the asset. We continue to look for attractive opportunities in our core sectors of student, healthcare and build to rent, focusing on prime locations and where the supply/demand dynamics remain compelling.”
Jamie Snary, Asset Management Director of Apache Capital Partners, said: “This sale to Cambridge County Council is a great example of a local authority investing back into their local community with the acquisition of this high quality purpose-built student accommodation asset with its exceptionally strong occupancy track record and defensive income profile. The transaction continues to underpin Apache Capital’s rationale of investing early into the alternative sectors, maximising value through a proactive asset management strategy and key focus on the end user, the occupier.”
Richard Jackson, Co-Founder and Managing Director of Apache Capital Partners, said: “This sale, for a record market yield for direct-let student accommodation outside London/the M25, reflects our strategic focus on investing early into alternative real estate sectors whose performance fundamentals are in part underpinned by limited high quality supply and non-discretionary spend. At Apache Capital, we continue to invest selectively into sectors supported by long-term demographic trends to create institutional grade assets and portfolios that offer attractive income and capital growth sustainable for the long term. We invest across the built-to-rent and wider residential sectors, student accommodation and healthcare, including retirement villages.”