Braemar Group, the Hale-based AIM-quoted property fund and management group, has opened its Student Accommodation open ended investment company, due to be listed on the Channel Islands Stock Exchange in the near future.
An initial portfolio has been purchased for £8.1m at a discount of 10% to its market value, with an annual gross yield of over 7%, a minimum rent increase of 4% a year and full occupancy underwritten for five years.
The company said the student housing market is forecast to grow from £6.6bn to over £20bn in the next six years, as student numbers continue to grow, rents rise and more students choose to live in purpose built accommodation.
Braemar added: "Student numbers are expected to increase by over 28% by 2014 and with universities having limited resources for accommodation and new Houses in Multiple Occupation legislation forcing some private landlords to quit the market, the prospects for private purpose built accommodation are strengthening further."
The fund vehicle will acquire established buildings for refurbishment and sites for development, to be run as privately operated halls of residence.
The first dealing date for the OEIC is 12 December 2008, with the deadline for applications being 5 December 2008. Monthly dealing will commence thereafter.