CPPIB boosts Liberty Living with £455m Blackstone digs buy

[caption id="attachment_869549" align="aligncenter" width="570"] Liberty Living’s University of Kent student housing[/caption] Canada Pension Plan Investment Board’s imminent acquisition of Blackstone’s Victoria Student Housing platform will boost its Liberty Living platform to 26,774 beds, making it the third largest operator in the UK, ahead of Goldman Sachs, and Wellcome Trust and Greystar’s Vero.  The £455m deal, reflecting a circa 5% yield, also illustrates the strong investor demand in the sector, where volume is set to reach £3.1bn in 2016, making it the second-highest year on record, according to Cushman & Wakefield. The 7,921-bed portfolio includes 32 assets across 11 cities. CPPIB fought off competition from Goldman Sachs and Vero and a joint venture between GSA and Singaporean sovereign wealth fund GIC. The Victoria Student Hall portfolio was the largest opportunity in the sector this year, eclipsing Avenue Capital’s £420m sale of its 6,000-bed portfolio to new entrant Brookfield Property Partners in February. Liberty Living entered the sector in March 2015 when it acquired the £1.1bn, 16,700- bed Liberty Living platform from the Brandeaux Student Accommodation Fund. Early predictions for investment volumes in 2017 suggest another strong year for the student accommodation sector as existing players seek to expand. Mike Mitchell, head of student investment at Cushman & Wakefield, said: “Next year we will see a turnover similar to this year. Existing players are well placed but anyone coming in new will have to either construct a platform or buy one from one of the smaller operators.” The deal also demonstrates the ongoing appetite from global sovereign wealth funds looking to amass scale in the UK student housing sector. While international interest in the sector remains strong, it is a good time for existing platforms to review options for their businesses. Niche student accommodation platform Study Inn has instructed Knight Frank and Savills to explore options for a sale next year. Its business is valued at around £200m and comprises around 2,000 beds across four operational assets in Cambridge, Coventry, Nottingham and Sheffield. It has a pipeline of a further six assets in university cities including Glasgow and Bristol. Australia’s largest student accommodation provider, Campus Living Villages, is also selling its 45,000-bed global platform, which includes properties in Australia, New Zealand, the UK and the US. The business is valued at £1bn and the sale is being run from Australia by UBS. • To send feedback, e-mail amber.rolt@estatesgazette.com or tweet @amberrolt or @estatesgazette