Contracts exchanged on £25m Bristol student scheme

Construction firm Watkin Jones has exchanged contracts with funds managed by investment firm KKR, to forward fund a purpose-built student accommodation  scheme in Bristol.

Watkin Jones were advised by Cushman & Wakefield and Addleshaw Goddard LLP. KKR were advised by Bryan Cave Leighton Paisner LLP.

Funds will be payable to Watkin Jones over the course of the scheme’s development, with an initial net cash receipt for Watkin Jones of £25m.

The funds have been invested through KKR’s European Core Plus Real Estate strategy, which focuses on investments in high-quality with long-term growth potential.

The scheme is in one of the five key sites identified in Bristol Council’s Bedminster Green Framework as a priority for redevelopment.

It will include 819 student beds – a mix of five to 12 bed cluster flats.

The development is expected to be completed in August 2024, when it will be fully leased on a long-term basis to the University of Bristol.

It will include 15,000 sq ft of internal amenity space and considerable external space will include a private terrace, courtyard and gardens, as well as access to the newly restored Malago River corridor.

Alex Pease, chief investment officer of Watkin Jones said: “We are delighted to have secured our second deal with KKR and would like to thank them for their efforts and partnership approach in reaching this agreement. This is an exciting opportunity to develop a key area of regeneration in the Bedminster area of Bristol for the ever-growing student needs in the city.

“The sale is further evidence of the attractive investment and operational fundamentals of both PBSA as a sector and Bristol as a city and a good sign of investment markets re-opening.

“Watkin Jones has a strong track record of developing PBSA schemes in Bristol as rising demand continues, including work recently completed at Wilder Street and Unity Street last year, in addition to work currently underway on a PBSA site on Gas Lane.

“We are really excited as Bristol is widely regarded as one of the UK’s top university towns for education, but it also represents one of the most vibrant and inclusive cities for students to live. Offering a wide range of bars, shops and restaurants, it is a city for students to enjoy.”