M&G Investments has provided GBP25 million of finance for the development of a 324 bed student residence for the University of St Andrews.
St Andrews is working in partnership with Campus Living Villages (CLV) which will manage the development and then operate the accommodation on completion.
M&G has acquired a long leasehold interest in the property. On completion of the development, the Fife Park residence will be leased to the St Andrews/CLV partnership for 40 years, with annual reviews linked to inflation. The rent is guaranteed by St Andrews and it has an option to acquire the residence on expiry of the 40-year lease.
This is the third time M&G and CLV have worked together. Last month they agreed to redevelop The Royal College of Music’s student residences in London.
The capital is provided by M&G’s pension fund clients.
Ben Jones, director of real estate income, M&G Investments, says: “This transaction enables the development of state-of-the-art accommodation at Scotland’s first university, renowned for its teaching and research. It demonstrates the willingness of institutional investors to invest in the growing student accommodation sector – the variety of transactions M&G has recently undertaken confirms this can be done using a wide range of structures. We are pleased to continue our relationship with CLV and we have significant capital to invest in comparable projects.”
Roger Smith, director of residential and business services at University of St Andrews, says: “We are dedicated to setting up our students for future success and we place great importance on the environment in which they live, as this has a massive impact on their University experience as a whole. For our new student accommodation, it was vital for us to find partners to work with that have a reputation for excellence and consideration of all aspects of student life. As leading international providers we are confident that M&G Investments together with CLV can meet our expectations.”
Sean McKeown, commercial director at Campus Living Villages, adds: “We are delighted to have been awarded the contract with the University of St Andrews. We are pleased to work with M&G Investments again on another project following the recent Royal College of Music and Bournemouth University deals.”