LGP invests in student accommodation schemes in Aberystwyth and Newcastle

Published: 15th August 2013

Legal & General Property (LGP) has acquired two new student accommodation schemes, one backed by Aberystwyth University and another let to Newcastle University, for a total consideration of GBP130m. 

Retaining its position as one of the most active investors in the sector, these deals bring Legal & General’s total commitment to nearly GBP750m. 

Representing its sixth and seventh major university-backed acquisitions, previous deals have included forward fundings with Imperial College, University of the Arts London, Southampton University and Greenwich University. Additionally, in May this year, L&G financed the University of Hertfordshire’s 3,000-bedroom student accommodation scheme through an index linked unwrapped private bond placement, having also previously secured a GBP121m, 10 year debt facility to UNITE.

In a transaction totalling GBP86m and reflecting a blended net initial yield of approximately five per cent, LGP has acquired three blocks of student accommodation and an academic facility, let to INTO Newcastle University on two 35-year leases from October 2012. Comprising 534 student rooms in total, the investment also includes 40,000 sq ft of bespoke, high specification teaching space. 

The blocks occupy highly prominent locations at the front of the University of Newcastle’s campus and currently represent its only on-campus accommodation. The properties were developed in 2011 and reached practical completion in July 2012. With high sustainability credentials, the buildings achieved a BREEAM “very good” rating.

Newcastle University (pictured) is one of the oldest universities in the UK, having opened in 1834 as a school of medicine and surgery. Today it has just under 20,000 full time students and is a member of the Russell Group of Universities, which is a group of the 20 leading UK research universities. 

LGP has purchased a new 1,000-bedroom, 23-block development, let to Aberystwyth University for 35 years from completion, for a total consideration of just over GBP43m. Work on site commenced in March 2013 and is being completed by December 2014. The lease will have the benefit of annual rent reviews linked to RPI. 

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