Braemar Group, the AIM quoted real estate fund manager based in Hale, reported that its Guernsey listed Student Accommodation Open Ended Investment Company, purchased a purpose built student accommodation building in Bristol for £6.57m, a discount of 9% to the market value.
Hotwells House comprises 142 beds in 32 flats and carries a full occupancy agreement underwritten for five years, as well as an annual gross yield of 9%, with a minimum rent increase of 4% a year. The level of debt on the acquisition is £4.3m.
Braemar said Bristol University and the University of Central England attracted 34,330 full time students in 2006/7. The universities only have 8,566 beds within their own stock leaving 23,535 students requiring accommodation. Student numbers nationally are expected to increase by over 28% by 2014.
Marc Duschenes, chief executive of Braemar, said he anticipated making further acquisitions in the coming months. He added: "Our fund performance, up 22% since inception, has been driven by our strong buying position, but with increasing numbers of students seeking modern quality accommodation fuelling rental inflation, there is no reason why rents should not continue to rise in the future."