Apache Capital exits student accommodation market

Apache Capital exits student accommodation market
Apache Capital has sold the last purpose-built student accommodation scheme in its portfolio. The UK-focused investment manager, which specialises in living real estate, has sold Cumberland Place to City Developments Limited, a Singapore-based investor and developer for over €35m (£30m), representing an exit yield of 4.81% and exceeding the target sale price. Completed in 2018, the high-quality student housing development is situated in the heart of Southampton, being a six-minute walk to the northwest of Southampton Solent University’s East Park Terrace campus and a 16-minute journey by public transport to the University of Southampton’s Highfield campus.
The property, which is fully let and has achieved 100% occupancy year-on-year, comprises 206 direct-let student beds arranged over 12 storeys. On-site amenities include a gym, screening room, 10th-floor sky deck and common room with panoramic views of the city across to the Isle of Wight. Apache Capital had previously sold its student accommodation assets in Cambridge and central London to Cambridge City Council and a Greystar-led joint venture respectively, with both transactions setting new sector benchmarks for exit yields. The exit yield for Cumberland Place is believed to be a new record for the Southampton market.
John Dunkerley, CEO and Co-Founder of Apache Capital, said: “Today’s announcement gives City Developments Limited a high quality, high performing asset that is underpinned by a strong location, good design and premium branding. The success of our purpose-built student accommodation assets, reflected in the sale price achieved in all three disposals, is a vindication of our strategy to pursue a highly amenitised, service-driven model in the UK’s emerging build-to-rent sector.”
Jamie Snary, Executive Director Asset Management and Operations at Apache Capital, said: “Cumberland Place has consistently performed strongly since its completion in 2018 with full occupancy being achieved year on year as well as consistently strong rental growth. As with all our assets, whether in our multi and single-family build-to-rent pipelines or our previous student accommodation investments, Cumberland Place was designed from the outset with the end user, the resident, in mind. This strategy has once again borne success with year-on-year re-booker rates exceeding market norms and consistently positive resident feedback and this is reflected in the sale price that has been achieved.”
Hugo Noble, Director of alternative specialist MTRE, who handled the sale on behalf of Apache Capital, said: “The sale of Cumberland Place reaffirms the appetite for well-positioned, high-quality student accommodation assets remains strong despite the current wider market conditions. The calibre of the investor interest was reflected in the pricing achieved and through the number of bids received, further highlighting the robustness of the purpose-built student accommodation sector in turbulent economic conditions."

Related News