Arlington Advisors, acting on behalf of Arlington Investors, has acquired a portfolio of 2,458 beds of purpose-built student accommodation (PBSA) for €309.2m (£280m). The deal is part of a joint venture with Equitix, a UK based investor and fund manager of infrastructure assets, specialising in long-term partnerships. The acquisition combines two separate transactions and is one of the largest UK student accommodation deals agreed during 2018. The deal brings the total number of PBSA beds under Arlington’s management to 12,700, making it the largest independently owned and 6th largest overall student accommodation platform in the UK. The purchase combines ‘The Stellar Portfolio’ from Fusion Students, and ‘Merlin Heights’ in Leicester from a private investor. In total, the acquisition features five high-quality assets located in cities with top 30 ranked UK universities.
‘The Stellar Portfolio’ features four best-in-class PBSA assets and was sold for more than the €256.2m (£232m) asking price. The buildings, which total 1,857 beds, are centrally located in the key Russell Group university cities of Newcastle, Nottingham, Cardiff and Bristol. The portfolio is currently operated by Collegiate AC. ‘Merlin Heights’ in Leicester comprises 601 beds and was developed to a high standard by Watkin Jones in 2016. It is currently operated by Fresh Student Living.
Sean McKeown, Managing Director at Arlington Advisors, said: “We are thrilled to bring 2018 to a close with this deal, which is one of the UK’s largest PBSA portfolio transactions of the year. This acquisition builds on Arlington’s track record within the student accommodation asset class which continues to offer attractive investment opportunities for our investors. We remain committed to expanding our activity within the sector with a strong pipeline already in place for 2019, where we expect to continue acquiring high-quality assets in premier city locations.”
Nigel Henry, Co-Founder and Director of Fusion Students, said: “The sale of ‘The Stellar Portfolio’ is a significant step forward in our corporate development. Our focus is on delivering memorable and rewarding university experiences for students in newly-built buildings that are thoughtfully designed, conveniently located, featuring experiential events and much-desired facilities.”
James Pullan, Global Head of Student Property at Knight Frank, commented: “‘The Stellar Portfolio’ is one of the highest quality portfolios ever to come to market. Investment appetite was ferocious, receiving bids from all over the world. Arlington Advisors was recognised for its ability to execute the deal and partnership it offers Fusion Students.”