Terrace Hill-Osborne JV agrees sale of Southampton development to LGP
Terrace Hill’s joint venture with Osborne has exchanged conditional contracts with Legal & General Property (LGP) for the forward funding and sale of its 1,104 unit student accommodation development in Southampton city centre.
The scheme is well located in the City centre with good access to transport links and is pre-let in its entirety to the University of Southampton on a 38 year lease, having received planning consent from Southampton City Council in July 2012. Construction is scheduled for completion in summer 2014.
The property will be arranged over three towers, ranging from eight to 16 storeys high, positioned around a central piazza. In addition to the student accommodation, the scheme includes a shop, café, gym and learning centre at ground level.
Philip Leech, chief executive of Terrace Hill, says: “Our student accommodation development at Mayflower Plaza is an extremely attractive, high quality scheme in a city with a large student population, let to a very strong tenant in the University of Southampton on a long lease. These factors underline the institutional quality of the asset, which has allowed us to secure the forward funding and sale of the property to Legal & General Property.”
Gordon Aitchison, director of investment and development at Legal & General Property, says: “In line with our fund objective to acquire long let, index-linked assets with investment grade covenants, this transaction provides us with a secure long term income stream that is hedged against inflation. Furthermore, representing our third major funding of student accommodation this year, it demonstrates our growing appetite to look to alternative sectors as attractive investment opportunities and the increasing role that the private sector will play in funding critical social infrastructure.”
The JV was advised by DTZ and Strutt & Parker. Legal & General Property was advised by Knight Frank.
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