Cordea Savills, the international property fund manager, announced completion of a £28 million (approx. 35 million) development in Edinburgh on behalf of its Student halls Fund. The project was in line with the UK capital cities/high calibre universities strategy of the Fund, which was ranked in the ninth percentile against the 237 ranked funds within the IPD Universe in the year ending June 2012.
Cordea Savills, the international property investment manager, has completed the development of Sugar House Close halls of residence in central Edinburgh on behalf of its Student Hall Fund. The Fund developed the halls after purchasing the site and buildings of a redundant brewery for an initial sum of £8.25 million in May 2011. The development is in line with the Fund's stated strategy of increasing its exposure to UK capital cities and high calibre universities.
Acquired as a forward funding project with developer Watkin Jones, Sugar House Close has been built to a high specification to provide 121 ensuite rooms, 151 studios and 28 "twodios". Completed in August 2012, it is now fully let having welcomed 300 University of Edinburgh students for the academic intake in September. With its close proximity to the University, it has proved a favourite among students, offering excellent facilities within a few minutes' walk of the Royal Mile.
The property benefits from a flexible planning consent that allows it to be used as an "aparthotel" during the Edinburgh Festival and outside of term time. It is anticipated that the asset will deliver a net distribution yield of 6.5% p.a.
Patrick Carr, Fund Director, commented: "Sugar House Close has proved to be an excellent acquisition for the Fund. It is a positive and accretive addition to the portfolio, providing high quality accommodation in a prime Edinburgh location."
Overall, the Fund maintains a strong occupation rate for the 2012/13 academic year at 93.3% and our focus remains on delivering a solid and consistent income stream to our investors.
The Cordea Savills Student Hall Fund is a closed-ended Jersey property unit trust with an annualised target return of 10% over the life of the Fund. It was launched in 2006 and seeks to achieve a balance of secure income streams provided by halls let on long leases or nomination agreements, complemented by halls let directly to students and forward commitment/funding opportunities offering the prospect of enhanced returns and capital growth.
In the year ending June 2012 the Fund was ranked in the 9th percentile against the 237 ranked funds within the IPD Universe. It was ranked first and third over a five and six year period respectively against the 51 Pooled Property Funds which contribute to the IPD Universe.