SPH acquires 14 UK student accommodation buildings for S$321m
Singapore Press Holdings (SPH) has acquired a portfolio of 14 purpose-built student accommodation buildings across six towns and cities in the United Kingdom for about £180.5 million (S$321 million) cash, it announced early yesterday morning before the market opened.
The buildings, acquired from the Unite Group, have a total capacity of 3,436 beds.
They include 10 freehold assets and four leasehold assets, and are located in established university towns and cities with large full-time student populations, namely London, Birmingham, Bristol, Huddersfield, Plymouth and Sheffield.
SPH, which owns The Straits Times, said that student accommodation in the UK has growth potential, with demand expected from both domestic and international students, driven by a rise in enrolment of first-year, international and postgraduate students.
SPH chief executive officer Ng Yat Chung said: "This cash-yielding acquisition will generate recurring cash flow and is part of our ongoing strategy to diversify our business to new growth areas.
"It will boost our real estate asset management portfolio, establish us as an overseas owner of PBSA (purpose-built student accommodation) in the UK, and allow us to pursue other growth opportunities in this sector."
SPH's wholly owned units, through which it is making the acquisition, will enter into an operating management agreement with Victoria Hall Management, an operator of student accommodation in the UK, to manage the properties.
The transaction is expected to complete on or around Sept 13, with the consideration funded by internal as well as external resources.
The consideration may be lowered by up to £13.7 million if actual income on certain assets is below 95 per cent of estimates, and Unite Group has provided a guarantee of up to £2.5 million to cover shortfalls between the estimated income and actual income of the assets as at Nov 30.
SPH declined to disclose the estimated income.
Net profit attributable to the assets being acquired was $12.1 million last year. - THE STRAITS TIMES