Unite sells PBSA projects for £184m

PGIM Real Estate has taken over 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, making them on the older side of the group’s portfolio – which averages 13 years.

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

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

The properties went 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 profit of 6.2%.

PGIM aims to redevelop all six properties, increasing the quality of the facilities on offer and also improving energy efficiency. The investment firm has appointed Generation Partners as asset and development manager for the project. Now Student Living will be the property manager. Part of Generation, Now Student Living now has 22 properties in its portfolio thanks to its latest offering.

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

“We believe the UK PBSA sector has strong fundamentals as demand for student housing will only 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, while providing a secure and stable income stream from day one.”

Generation Partners chief executive Alan Artus echoed Waldschmidt’s observations about the modernization angle. “The opportunity to upgrade these assets to provide high-quality PBSA while appealing to a broad student population is an exciting challenge, and we look forward to working with PGIM to meet our shared goals,” said Artus.

On the growing nature of its PBSA portfolio, Now Student Living managing director Paul Watson said: “This portfolio represents a selection of well-located, well-appointed PBSA residences that are ideal for serving a wide range of students nationals and internationals looking for affordable, well-managed accommodation throughout their studies in top university cities.”

As well as the 635-bed Prospect Point in Liverpool and the 437-bed Exchange Works in Sheffield, the other properties sold are:

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

In total, the projects amount to 2,948 beds.

The property handover process is managed by acquisitions agency Fjeld Consulting on behalf of Now Student Living, which has helped the property portfolio grow to 22 since it was founded in 2023.

Fjeld Consulting Head of Consulting Services, Scott Blakeway, said: “We are proud that Fjeld Consulting has been instrumental in supporting the rapid growth journey of the Now Student Living PBSA platform. In less than 12 months, I have worked closely with the team to support their expansion from the ground up to an outstanding portfolio of 22 properties and most recently the acquisition of six properties from Unite Students.”

Blakeway continued: “Our partnership with Now Student Living has not only driven operational efficiencies, but also had a significant impact on investment prospects. Using our expertise and strategic guidance, we project managed the delivery process, engineered solutions and executed initiatives that propelled business growth and supported operational excellence.

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

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