Unite sells PBSA projects for £184m

PGIM Real Estate has picked up six of the developer’s student accommodation properties, including Prospect Point in Liverpool and Exchange Works in Sheffield.

Unite Students noted that the developments have an average age of 18 years, which makes them on the older side of the group’s portfolio – which averages 13 years.

“These disposals continue our disciplined approach of recycling capital for reinvestment and further increases our alignment to the strongest universities,” said Joe Lister, chief executive of Unite Students.

“The growth outlook for purpose-built student accommodation remains compelling and we are tracking a number of new investment opportunities at attractive returns,” he continued.

The properties had gone on the market in December and were priced in line with book value, according to Unite. The group said the prices reflected a net operating income yield of 6.2%.

PGIM aims to refurbish all six properties, boosting the quality of the amenities offered and also improving energy efficiency. The investment firm has appointed Generation Partners as the asset and development manager for the project. Now Student Living will be the property manager for the properties. Part of Generation, Now Student Living now has 22 properties within its portfolio thanks to the most recent deal.

Tobias Waldschmidt, senior portfolio manager of European core plus strategy at PGIM, said: “In the current market environment, it’s rare to find a stabilised portfolio with high-quality yielding assets located in key regional cities.

“We believe the UK PBSA sector has strong underlying fundamentals as demand for student housing is only set to increase with more students applying for university,” he continued. “We are confident that, together with Generation Partners, we can add value to this portfolio on behalf of our investors, whilst delivering a secure stable income stream from day one.”

Generation Partners chief executive Alan Artus built upon Waldschmidt’s remarks on the retrofit angle. “The opportunity to upgrade these assets to provide high-quality PBSA whilst still appealing to a broad student demographic is an exciting challenge and we look forward to working with PGIM to deliver our joint objectives,” Artus said.

Regarding the growing nature of its PBSA portfolio, Now Student Living managing director Paul Watson said: “This portfolio represents a selection of well-located, well-provisioned PBSA residences that are ideally suited to serve a broad range of domestic and international students looking for affordable, well-managed accommodation throughout their time studying in leading university cities.”

In addition to the 635-bed Prospect Point in Liverpool and 437-bed Exchange Works in Sheffield, the other sold properties are:

• the 596-bed Jennens Court in Birmingham
• the 253-bed North Court in Cardiff
• the 219-bed Grange in Leicester
• the 808-bed St Peter’s Court in Nottingham

In total, the projects account for 2,948 beds.

The handover process for the properties is being managed by procurement agency Fjeld Consulting on behalf of Now Student Living, having helped the portfolio of properties grow to 22 since it was founded in 2023.

Fjeld Consulting head of consultancy services Scott Blakeway said: “We are proud that Fjeld Consulting has played a pivotal role in supporting the rapid growth journey of the Now Student Living PBSA platform. In under 12 months, we’ve worked closely with the team to support their expansion from inception to a remarkable portfolio of 22 properties, and most recently the acquisition of six properties from the Unite Students.”

Blakeway continued: “Our partnership with Now Student Living has not only driven operational efficiency but has also had a significant impact on investment prospects.  Leveraging our expertise and strategic guidance, we have project-managed the handover process, engineering solutions and executing initiatives that have propelled the growth of the business and championed operational excellence.

“The collaboration exemplifies our dedication to driving tangible and scalable results that deliver value beyond expectations,” he concluded.

Back to Unite, the PBSA specialist may be selling part of its portfolio, but it is also still building. The company is working with Newcastle University to deliver 2,000 beds at the Castle Leazes estate – a scheme that is expected to have construction start early next year.