M&G Investments has acquired three prime student accommodation blocks in Bournemouth on a freehold basis for GBP38.05m from Spectrum Housing Group.
Lyme Regis House, Chesil House and Okeford House comprise 704 en-suite rooms arranged in cluster flats and are let to Campus Living Villages on a full repairing and insuring lease for 35 years, with annual rent reviews linked to inflation. There is an 18 year nominations agreement between Bournemouth University and Campus Living Villages for the properties.
The capital is provided by the GBP1.53bn M&G Secured Property Income Fund. This fund invests in and develops a wide range of real estate, such as supermarkets, hotels, offices and residential. These properties are leased to tenants over the long-term to provide M&G’s pension fund investors with returns linked to inflation.
Ben Jones, manager of the M&G Secured Property Income Fund, says: “We are pleased to have acquired such high quality existing student accommodation with a longstanding record of full occupancy in an undersupplied location. It meets the needs of our pension fund clients who require long-term income streams linked to inflation. We have long invested in this sector, most recently providing the finance for new student accommodation to be built at Swansea University, and intend to continue in this vein.”
Sean McKeown, commercial director at Campus Living Villages, says: “CLV is excited with the new addition to its student accommodation portfolio at Bournemouth University. Over the course of the project we have developed a good relationship with M&G Investments and hope this will be the first of several partnerships we have proposed with M&G.”
The fund was advised by M&G Real Estate who were advised by Montagu Evans.