Vita sells ground rents for £7.1m

GROUND Rents Income Fund (GRIF), an investment trust managed by Brooks MacDonald, has agreed a £7.1m ground rents deal with upmarket student accommodation business Vita Student.

It has acquired the rents at four properties and exchanged contracts on two others. The deal covers Vita sites in Liverpool, Bristol, Exeter and Southampton where it has 848 units in six buildings.

The total ground rent income will be £296,800 a year, reflecting an initial yield of 4.17%.

James Agar, investment director of Brooks Macdonald, said: “The Vita Student acquisition provides shareholders with a significant portfolio of stable, secure, income-producing assets. This income is closely correlated to inflation at a mixture of five and 10-year intervals, reducing the average review cycle of the portfolio.
 
“Student accommodation continues to be an attractive sector to both UK and international investors and Vita has leveraged its long-term international client relationships in order to facilitate this market opportunity. The high-quality nature of each development is very attractive and the brand offering will continue to generate stable returns for underlying unit owners.”
 
Mark Stott, chief executive of Vita’s parent Select Property, said: “Student property is currently performing very strongly. The Vita Student proposition represents the very finest student residences on the market which has resulted in them being extremely sought-after by investors and students alike, so it was no surprise that James and the team at Brooks Macdonald were interested in securing a long-term interest in this first phase of our project pipeline.”