LaSalle Investment Management confirms £40 mln. deal with Brookgate for Cambridge student development (UK)

LaSalle Investment Management ('LaSalle') and Brookgate have concluded a major funding deal for the development of three student accommodation buildings for Anglia Ruskin University ('ARU') at cb1, Brookgate's 26-acre gateway development at Station Road, Cambridge.

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The three student buildings will total 140,000 ft² (approx. 13,000 m²) and provide 511 en-suite bedrooms in 112 studios and 399 apartments.

LaSalle is acquiring the student accommodation for £40 million (approx. €46 million) on behalf of an institutional client. It will be one of the first institutional funding deals in the student sector outside London and the buildings will be let to ARU on a nomination agreement rather than a conventional lease. The purchase price reflects a yield of around 6.5%.

The three student buildings will total 140,000 ft² (approx. 13,000 m²) and provide 511 en-suite bedrooms in 112 studios and 399 apartments. In addition there will be 8,859 ft² of retail space for letting. Construction started on March 11, 2011 for completion in summer 2012. Designed by architects TP Bennett, the buildings will be constructed to achieve a BREEAM 'excellent' rating for sustainability.

The development was enabled by a deal last year between Brookgate and Network Rail to create a radically improved public transport interchange at the heart of the city and including the refurbishment of existing station buildings. The ARU buildings will provide much-needed, purpose-built student accommodation for central Cambridge, allowing students to move out of multi-occupancy housing which can then revert to family dwellings.

Sven Topel, Chief Executive of Brookgate, said: "Securing funding for this significant element of cb1 is a major vote of confidence in the project and coincides with news of similar funding success on our nearby building for Microsoft. These are significant milestones in the delivery of Brookgate's vision for this important gateway location."

In addition to student accommodation, the cb1 master plan will provide 600,000 ft² of commercial space and 630,000 ft² of residential, plus retail, restaurants and bars. The project also provides a refurbished station concourse and new public square, new transport interchange, high quality hotel and a parking facility.

John Yeend, Director of LaSalle Investment Management commented: "This deal demonstrates that we are able to partner with developers to close the gap in financing where there are good quality development opportunities. This is the second major deal we have financed in the last six months and highlights the growing confidence among some developers to seek funding.

"The development at cb1 will offer our clients a quality income stream in a prime student location and is one of a number of developments that our client funds are funding."

Bidwells advised Brookgate on the transaction, while AHBN represented LaSalle Investment Management.

Source: FD

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