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Barclays sell 60% share in student housing company

Buy-to-let investors from all of the world are showing interest in the student property market, now a Dutch company have a stake in some shares from Barclays.

In summary

  • The deal is worth an estimated £840 million
  • The value of the company, UPP is said to be £1.4 billion
  • UPP manage dorms for 11 universities

The student property market is thriving at the moment and interest from overseas is continually increasing with buy-to-let investors from all over the world looking to benefit from the market over here.

This notion was furthered this week by the fact that Barclays sold a 60 percent share of the second-biggest student housing operator, UPP Group Holdings Inc to a Dutch pension fund manager PGGM NV.

The deal has an estimated worth of £840 million and PGGM said in a statement that the estimated value of the company is £1.4 billion including debt.

Data from Jones Lang LaSalle demonstrates that last year the UK sold around £1.18 billion of student accommodation but this figure could be overtaken this year with around £800 million worth of transactions already taking place in the first half of the year.

This is an indication of the increased interest of buy-to-let investors who are keen on putting their money in the lucrative market which offers assured high rental returns and potential rent increases.

In the statement, Henk Huizing, PGGM’s Head of Infrastructure said: “The inflation-linked, stable cash flows are an excellent match with our clients’ liabilities.”

UPP currently manages dorms for 11 UK universities where around 22,000 students are housed. This generates an annual income of around £104 million and the company aim to invest around £1billion over the next two years to build and renovate facilities highlighting the fact that students now require more quality in their accommodation. This further investment is expected to increase the yearly rental value to £133 million.

Whilst the rest of the UK housing market is somewhat stagnant, the student market is constantly improving indicating the reason why many investors are opting to increase their portfolios via this sector.

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