Braemar buys £7.7m student property
HALE-based property investment group Braemar has bought a property in Newcastle for £7.7m, through its Student Accommodation Fund.
Garth Heads, a 15 minute walk from Northumbria University’s city campus, was initially occupied by dockworkers in the 19th century.
It has since been converted to 34 student flats, holding 185 beds house, and Braemar said it will undertake a significant refit to bring the building up to higher standards.
The units carry a full occupancy agreement underwritten for five years, purchased on an annual gross yield of 7%, with a minimum rent increase of 4% a year.
The deal was funded with around £5m from Barclays Bank, and law firm Lupton Fawcett advised Braemar.
Marc Duschenes, chief executive of the AIM-listed company, said: “Garth Heads is a strong addition to our portfolio of student accommodation and we continue to be excited by the prospects for the student sector.
“With student numbers swelling as job prospects dwindle, the sector looks like it might be one of the early emergents from the property recession.”
Braemar launched its Student Accommodation OEIC (Open Ended Investment Company) in December 2008 and it has seen 23% growth since, according to the company.
It has now purchased over £25m of property, representing over 500 beds, since the fund launched and is advised by Knight Frank.
