Rockspring Property Investment Managers has announced the acquisition of Leodis Student Residences in Leeds, a significant student accommodation scheme, from the Evans Group, on behalf of a pension fund client. Rockspring acquired this asset in conjunction with its partner, The Mansion Group.
Leodis Student Residences is located in central Leeds, a five-minute walk from the University of Leeds. It contains 717 en-suite bedrooms arranged in cluster flats and is leased to the University of Leeds.
This is the third acquisition of a student accommodation asset undertaken for its clients by Rockspring, and the second with the Mansion Group following its acquisition of 123 Fountainbridge, Edinburgh for £14.2 million (approx. 16.6 million) on behalf of the Rockspring UK Value Fund in October 2010.
Following this acquisition, Rockspring clients now own over 1,200 beds. Rockspring continues to view the counter-cyclical nature of higher education as a relatively stable and secure market with valuations underpinned by a fundamental supply/demand imbalance.
Robert Gilchrist, Chief Executive of Rockspring, commented: "The acquisition of this site provides a good opportunity for us to further exploit the rapidly developing student accommodation market, and is in line with our strategy of purchasing well-located, well-let assets associated with the strongest universities, with the potential to enhance income through active asset management initiatives.
"Following the success at 123 Fountainbridge, we look forward to working again with The Mansion Group, and benefiting once more from their extensive experience in the sector."
Jones Lang LaSalle represented the Evans Group.
In a second deal, Rockspring announces that it has also acquired a speculative office development at The Causeway, Staines, from Hammerson for £5.2 million on behalf of a pension fund client.
This marks the second funding of an Exton Estates scheme by Rockspring, following the 105,000-ft² Velocity scheme in Brooklands, Weybridge.
The joint venture plans to implement an extensive redevelopment program to create two new, grade-A, self-contained headquarter office buildings, totaling almost 60,000 ft², arranged over three and four floors.
With an estimated development cost of £17 million, construction is due to start on site in spring 2012, with the aim of releasing the BREEAM Excellent offices to the occupational market in spring 2013. The new development will be called Flow.
Situated in The Causeway, Staines' premier edge of town office location, the site benefits from proximity to the town center, the River Thames and M25, and is expected to benefit from the favorable supply/demand imbalance that continues to drive the M25 west office market.
The purchase follows a number of recent development acquisitions by clients of Rockspring, including 63 St Mary's Axe, a 70,000-ft² office building in the heart of the City of London, and Centurion House, a speculative 80,000-ft² office development, also in the City, where planning consent was secured earlier this year.
Other major office projects outside of London include Kings House and Conquest House in Kingston, where Rockspring secured the largest South East office letting outside Central London so far this year; a 100,000-ft² speculative grade-A office development called Velocity in Weybridge which will be delivered to the market in the autumn of 2012; and The Stanza Building in Uxbridge, an 81,000-ft² grade-A office which will be delivered in summer 2012.
Neal Shegog, Partner at Rockspring, said: "Having made significant progress on our South East office portfolio already this year, including securing the largest pre-let outside central London, this purchase further strengthens our development exposure in this market, where we believe limited new supply, coupled with strong demand, makes it an attractive investment opportunity.
"The acquisition of this site provides the opportunity to deliver Grade A office scheme into an undersupplied market and we expect to see strong