Singapore’s Mapletree acquires US$227 M UK student accommodation asset

Mapletree

With the Purpose-Built Student Accommodation (PSBA) asset class in the UK in free-fall owing  to the COVID pandemic, Singapore’s Mapletree  has capitalised upon some superb opportunities.

Mapletree Investments Expands PBSA Presence in the UK

With the COVID-19 crisis receding in Britain, and universities considering reopening, Mapletree Investments seized an opportunity to acquire four student housing assets in the UK from the Vita Group for £163m (€190m).

Mapletree
Mapletree Investments – PSBA in UK

“This acquisition will enhance the scale and reach of our PBSA presence in the UK.” – Chua Tiow Chye, Mapletree’s deputy group CEO.

Mapletree Investments aims to grow the student accommodation sector anchored by a stable and resilient asset class, underlying student enrollment needs. The PBSA assets with the capacity of 917 beds are located in Bristol, Exeter, Leeds, and Nottingham. Vita Group, UK residential developer, will operate all four locations under the Vita Student brand.

The acquisition compliments Mapletree’s growing student housing footprint in the UK. It will continue to expand in this asset class with long-term growth prospects supported by strong fundamentals of domestic as well as international student demands. 

Strategic Partnership – Mapletree Investments and Vita Group

Singapore’s leading investment, property, development, and capital management company, Mapletree Investment Pte Ltd, demonstrated confidence in the UK Purpose-Built Student Accommodation (PSBA) market and the Vita Student brand. This led to a sales agreement of the assets where Mapletree purchased four Vita Student residencies from the industry-leading development and operating platform, Vita Group. 

The CEO of Vita Group, Mark Stott, said that Vita has formed a strategic partnership with Mapletree by agreeing to sell the assets. He is excited by securing this deal as it will provide Vita Group with the confidence and capital to enable continuous development. As a result, the Vita group platform will thrive with the launch of new brands and a strong, ever-increasing future pipeline of projects outlined for the next five years.

Mapletree
Mr Chua Tiow Chye – Expanding Mapletree Investments PBSA Presence in the UK

On the other hand, Mr. Chua Tiow Chye, Mapletree’s Deputy Chief Executive Officer, said that the acquisition enables a strong foothold in the UK PBSA market to strengthen the new additions to their portfolio. With the PBSA markets in the UK and UK under recovering mode after the worst part of the Covid-19 pandemic, and the universities opening for face-to-face lessons in the coming academic year, there would be high student enrollment rates, enabling strong pre-leasing rates of student beds. It would deliver solid growth, exploring other markets.

The portfolio totaling 917 beds split across four sites – Zed Alley in Bristol, Portland House in Exeter, Portland Crescent in Leeds, and Station Street in Nottingham. It includes prominent Vita Student assets delivering high occupancy levels since its inception.

Legal advisors CMS and Shoosmiths, the UK law firms, together with financial planning adviser PWC, acted on behalf of Vita Group. Mapletree took legal work advice from Baker McKenzie and involved Paragon for technical advice and EY for finance and tax. The transactions are introduced and led by Savills Capital Advisors.

Ralph Watson, Savills Director, is delighted to advise the Vita Group on the significant transaction. According to him, the sale of the portfolio to Mapletree, Singapore’s prominent institutional investors, strengthens Vita’s platform, product, and service model. Furthermore, it supports and secures the student accommodation sector in the UK from investors attracted towards its future growth prospects.

The Details of the Portfolio

 The locations have been wisely selected to offer greater education access and convenience to students. Moreover, they are just a walking distance to a higher-education campus and within a few kilometers of two such schools. Besides, it provides other facilities including train stations and town centers. 

Station Street in Nottingham, built-in 2020, serves the University of Nottingham, 3 km, and Nottingham Trent University, 1.2 km, has 321 beds and rents starting at £232 per week. Amenities such as a coffee lounge, a cinema room, and bike storage are other features of the building. Also, it is just a few steps away from Nottingham’s railway station.

Mapletree
Station Street in Nottingham – Features & Amenities

The Portland Crescent in Leeds offers 308 beds and was built in 2020. It is situated near Leeds Beckett University, 0.1km, and the University of Leeds, 0.5 km. The rents start at £278 a week, including the facilities such as a karaoke room, communal roof terrace, and an on-site supermarket.

Mapletree
Portland Crescent in Leeds – Student Accommodation Sector

Portland House in Exeter sleeps 156 beds with rents starting at £238 a week. It was built in 2014 and is just a 1KM away from the University of Exeter and 0.8 km from Exeter College. 

Zed Alley in Bristol, built in 2014, houses 132 beds. The rents start at £330 a week and welcome students from the University of Bristol, 0.3 km and 0.8 km from the City College of Bristol. 

More About Mapletree Investments and the Recent Deals

Mapletree Investments was founded in the year 2000. It currently owns and manages S$66.3 billion of retail, office, logistics, data center, industrial, residential, and lodging properties. In addition, it administers five private equity real estate funds, holding a portfolio of assets in Europe, Asia Pacific, the UK, and the US. Besides, it also manages four Singapore-listed Real Estates Investment Trusts (REITs).

In June, signs of a thaw emerged as Unite Students, a UK-based provider of student accommodation, announced the sale of two student housing properties in London to its joint venture with Singapore’s GIC, London Student Accommodation (LSAV), for $472 million.

The overall student housing portfolio, including the US, UK, and Canada, currently acquires 55 assets and brings more than 23,000 beds, with total assets under management of approximately S$4 billion. Mapletree Global Student Accommodation Private Trust is a private fund that holds around 60% of these beds. 

The Mapletree Group’s assets are situated across 13 markets globally. It includes Singapore, the UK, the US, Canada, China, Australia, Europe, Japan, Hong Kong SAR, India, South Korea, Malaysia, and Vietnam. Mapletrees has established a network of offices in all these countries to support global operations.

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