DevSec-Accrue JV buys Fallowfield halls

Ladybarn HousePublicly listed property company Development Securities has made its debut in the student housing sector through Accrue Manchester LP, a joint venture with private equity house Accrue Capital.

Ladybarn House has been bought on a long lease from Manchester University for £7m, a yield of 6.25%. Senior debt of £4.55m for the transaction was provided by the Co-operative Bank.

The asset is an established hall of residence in Fallowfield, the university's main residential heartland, and contains 120 self-catering rooms advertised from £109 a week. The block is aimed at postgraduates including couples and families.

DevSec told the London Stock Exchange: "Accrue Manchester will undertake a rolling refurbishment to upgrade kitchens and bathrooms, having already reconfigured the accommodation. Upon completion of these additional works next year, the yield is anticipated to increase to an amount in excess of 8%.

"Ladybarn House was fully let by Accrue Manchester between exchange and completion of the purchase contract. This deal is part of Development Securities strategy to explore additional asset classes with interesting demand:supply ratios that hold opportunities for value creation."

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