SPH buys 7 more UK student accommodation assets for $723m
Singapore Press Holdings (SPH) has expanded its purpose-built student accommodation portfolio with the acquisition of seven assets in the United Kingdom for £411 million (S$723 million).
This will add 2,383 beds to SPH's portfolio, bringing the total number to 7,726 beds across 18 cities in the UK and Germany, the media group said yesterday.
It also grows SPH's footprint across seven additional UK cities: Cambridge, Oxford, Bath, Brighton, Durham, Edinburgh and York.
The two assets in Oxford and Brighton are under development and expected to be operational for the academic year 2020/21. SPH will spend about £37 million in estimated construction costs for both assets, to be paid progressively till their completion.
About 84 per cent of the beds are close to top-ranked universities, including the University of Oxford and the University of Cambridge. The transaction increases SPH's presence in cities where the supply of student housing is limited, SPH noted.
The acquisition was completed simultaneously with the signing of the sales and purchase agreement on Dec 20 by SPH's wholly owned subsidiary Straits Ten and 10 vendors for all shares in Student Castle Investments Holdco, which owns and manages the portfolio.
The £411 million consideration payable by Straits Ten includes a £260.7 million payment to the vendors for their Student Castle shares, a £131.9 million payment to HSBC UK Bank to fully discharge amounts owed by Student Castle under existing loans, and a rental guarantee and an income support amount.
It also includes £3.2 million in construction costs, equivalent to 10 per cent of the estimated remaining amounts due to the building contractors of the two assets under development.
The operational assets in Cambridge, Bath, Durham, Edinburgh and York have an average age of 2.6 years and have consistently enjoyed close to full occupancy, SPH said.
Get The New Paper on your phone with the free TNP app. Download from the Apple App Store or Google Play Store now
