City Developments Limited (CDL) has acquired five high-quality purpose-built student accommodation (PBSA) assets for GBP215 million ($357 million), adding to its existing student accommodation portfolio in the UK.
The acquisitions, which comprise a total of 1,863 beds, were made via two separate transactions.
The five assets are located in Birmingham, Canterbury, Coventry, Leeds and Southampton and have an average age of less than three years. The assets are said to come with “excellent amenities” and are located in prime catchment areas, close to key transportation nodes and prominent universities.
The assets enjoy an average committed occupancy rate of over 98%, says CDL.
Upon the completion of the acquisitions, CDL’s PBSA portfolio will have six assets and 2,368 beds in total. The group first made its entrance into the UK PBSA sector when it acquired the 505-bed Infinity in June this year.
“The UK student accommodation sector continues to demonstrate strong resilience as students return to campus post-Covid. Our newly acquired assets are strategically located in cities where there is high demand but traditionally underserved by a lack of supply, providing further rental growth potential in the longer term,” says Sherman Kwek, CDL’s group CEO.
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With universities in the UK enhancing their global positioning, it presents an exciting opportunity for us to amplify our presence in this sector and strengthen our recurring income,” he adds.
In addition to its PBSA assets, CDL says it has a pipeline of over 1,300 private rented sector (PRS) units.
Its first PRS project, located in Leeds, has just completed its first phased completion this month. When completed, the project will provide 665 PRS apartments and 24,000 sq ft of commercial space.
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Another PRS site in Birmingham is in progress and is slated to be completed in 2025. The second site is said to be the world’s tallest pure octagonal residential skyscraper comprising 370 PRS units upon its completion.
CDL’s hospitality REIT, CDL Hospitality Trusts (CDLHT) is also developing yet another 352-unit PRS project in Manchester.
As at 3.09pm, shares in CDL are trading flat at $8.25.
