The acquisition, which was carried out by SPH’s subsidiary, Straits Ten Pte Ltd, involved 2,383 beds of Purpose-Built Student Accommodation (PBSA), raising the company’s total portfolio to 7,726 beds.
SPH’s student housing assets in Europe span 18 cities in the UK and Germany. The new acquisition expands its footprint across seven new UK cities – Cambridge, Oxford, Bath, Brighton, Durham, Edinburgh, and York.
About 84 per cent of the beds are close to top-ranked and Russell Group universities, including the world-renowned University of Oxford and the University of Cambridge.
In a disclosure to the Singapore Exchange, SPH said the deal involves an initial cash consideration of 411 million pounds ($546 million) for the portfolio.
The estimated construction costs to complete the development of the assets to be paid progressively until completion are approximately 37 million pounds ($48 million).
Based on the Cushman & Wakefield valuation report, the aggregate market value of the assets as at 31 October 2019 is 448 million pounds ($583 million), on the assumption that the development assets have been completed and are operational.
“The acquisition is in line with the company’s strategy of acquiring purpose-built student accommodation assets that complement our existing portfolio,” SPH said.
Two of the seven assets are under development. The five operational assets have an average age of 2.6 years and have consistently enjoyed close to full occupancy. The assets are operated and managed by Student Castle Limited, a subsidiary of the seller.
The acquisition also comes as the fundamentals of the student accommodation sector in the UK remain well-supported by positive secular trends in the domestic 18-year-old population, positive government policies to grow the number of foreign students, and a record number of international students from outside Europe.
The acquisition also includes the Student Castle operating paltform, comprising its brand, its proprietary booking system, and its employees, SPH said.
In April, SPH entered into a sale and purchase agreement with Habitus Holdings, Privilege Holdings, Privilege Southampton Holdings, and AIGGRE Europe Real Estate Fund I GP for the acquisition of $174.3 million worth of student housing assets in the UK.