Hines has launched its first move into the student housing market globally with the acquisition of six prime development sites in the UK from McLaren Property.
A new investment vehicle owned by a group of German pension funds and managed by Hines has entered into the forward funding agreement for the portfolio valued at approximately £150m.
The portfolio comprises six development sites in Cambridge, Oxford, Kingston, Aberdeen and two locations in Brighton, and will deliver more than 1,100 beds in total. Planning consent to develop purpose-built student accommodation has been secured on four sites, with approval on the remaining two expected later this year. Construction work is expected to begin imminently, with the developments expected to complete in 2017 and 2018.
This is the first collaboration between the two companies, with Hines securing the forward funding and assuming asset management responsibility upon completion, and McLaren acting as developer.
The acquisition forms a key part of Hines’s current strategy of diversifying into new asset classes to build on its existing, established portfolio of office, retail, industrial and residential investments. The firm expects to further strengthen its student housing platform, both in the UK and elsewhere, this year.
Alex Knapp, Hines managing director, said: “We have been waiting for the right opportunity to enter the student housing market. The combination of McLaren’s strong track record and the rare opportunity to secure a portfolio comprising assets in such prime locations make this a perfect entry for us into this exciting market sector. We look forward to working with McLaren to ensure the success of this cornerstone acquisition.”
Lars Huber, Co-CEO for Hines Europe, said: “The firm is embarking on a strategy of asset diversification across the UK and Europe, and we are delighted to make Hines’ first venture into student housing globally. The fundamentals of the UK market are very strong with growing student-population numbers driven by the strength and reputation of UK universities. We hope to further our presence in this burgeoning market, both in the UK and elsewhere, with further announcements expected soon.”
John Gatley, Managing Director for McLaren Property, said: “We are delighted to have established this relationship with Hines, and we hope to continue to develop further opportunities together. The student accommodation sector has performed exceptionally well, and we expect it to continue to do so. This transaction represents the latest tranche of our total development portfolio of circa 4000 units, and we remain active in securing further developments and investment opportunities in this sector.”
