Legal & General’s UK Property Fund has bought five student accommodation blocks for €55.8m (£49.6m), representing an initial yield of 5.78%. Let to INTO University of Exeter on a 35-year lease, the student accommodation totals 517 rooms comprising a combination of 160 studio rooms, 355 en-suite cluster rooms and two staff rooms across five blocks. The accommodation is just a short walk from the main University campus, to the North of the main University buildings.
INTO Academic Facility
Legal & General’s LPI (Limited Price Inflation) Income Property Fund has bought the INTO Academic Facility at Exeter University for €29.7m(£26.4m). The property lease is guaranteed by the University of Exeter and is for a term of 30 years. The 36,000 ft² teaching facility is located right at the heart of the Exeter University Campus and is a modern, bespoke, high-specification building.
Matt Jarvis, Fund Manager of the Legal & General UK Property Fund, said: “The quality of accommodation and teaching facilities represents a large factor for students when deciding where they want to go to University. We believe that quality facilities help to provide a quality education and we will continue to target universities like Exeter which have modern purpose built living and teaching accommodation. This acquisition is in line with our strategy for the UK property Fund to target income producing assets on longer leases as well as our ambition to increase our exposure to alternatives.”
Derek Gilby, Senior Fund Manager of the LPI Income Property Fund, commented: “The ability for LGIM Real assets to purchase these two elements in different funds was key to delivering the deal. It also demonstrates the breadth of our fund management platform which has enabled us to collaborate to satisfy our differing customer needs. This is an excellent buy for the fund, offering a secure long-term income stream from a top investment grade University as well as satisfying our objective of continuing to secure public sector tenants for the Fund.”
CBRE advised Legal & General on the transactions.