Apache puts prime £150m student block up for sale

Apache Capital Partners has put one of the most valuable individual student accommodation blocks in the UK up for sale for £150m. The company has begun approaching investors over a prospective disposal of its 482-bed asset at Paul Street East in Shoreditch, EC2. It has appointed MTRE, the specialist alternatives consultancy, to market the opportunity. The price sought reflects a 4% yield, which is expected to rise to around 4.25% following rental increases in the next academic year. The sale is a rare opportunity for investors to gain exposure to the prime student accommodation market without having to buy a portfolio of assets. Paul Street East is fully let and operated by Host, the management arm of O’Flynn Capital Partners’ Victoria Hall Management division. It was originally developed in a joint venture with McClaren Property and completed in 2015. Earlier this week Apache sold Brunswick House, a 251-bed student block in Cambridge to Cambridge City Council at a 4.76% yield, a record for a property outside the M25. According to CBRE there has been a relative slowdown in activity in the student accomodation market this year, with £1.9bn of transactions thus far compared to £4.7bn having transacted during a bumper 2017, with the reduction in activity in part due to fewer portfolios hitting the market as private equity firms have now largely divested the assets they bought in the last cycle. Despite selling off some of its student portfolio, Apache is still looking for new opportunities in student accommodation and healthcare, as well as in the build-to-rent sector, in which it is building a portfolio to hold and operate on a long-term basis. All parties declined to comment. To send feedback, e-mail david.hatcher@egi.co.uk or tweet @hatcherdavid or @estatesgazette