Asian investors snap up student accommodaton development in £15m deal
A 140-bed purpose-built student accommodation development in Birmingham has been sold in a deal worth £15m.
Birmingham Properties Group has sold Bromsgrove House to the Singaporean investor Perfection Point. The sale price reflects a value of £104,000 per bed space and a net initial yield of 6.42%.
The PBSA scheme has an estimated gross student income of £1,252,499 for the 2017/18 academic year, additionally to this, the ground floor retail unit (3,282 sq ft) is leased for £40,000 per annum.
Bromsgrove House, which was completed in September 2017, comprises 140 bedrooms over ground and seven upper floors. The accommodation, in the Southside Chinatown area, is arranged from the first floor upwards, with 19 studios and one deluxe apartment per floor.
Each floor within the development has a private study or snug area. The property benefits from a gym, cinema room, dinner party room, two games rooms, lounge and a meeting room. All rooms are finished to a very high standard with well-equipped modern kitchens and bathrooms throughout.
John Tebbutt, managing director of Birmingham Properties Group, said: “This is our third student development we have undertaken in Birmingham. The group is very active in both the residential and student markets, and we are keen to secure additional opportunities.”
BPG was advised by Knight Frank’s Student Property team.
Rupert Strutt, Knight Frank Student Property, said: “The student accommodation market continues to prosper in Birmingham, particularly the city centre sub market which has seen a number of new developments over the past 18 months. This deal demonstrates the appetite from Asian investors into the sector remains strong.”
Mark Evans, Head of Regional Residential Development at Knight Frank, added: “In recent years Birmingham has established a compelling investment case, with global capital committing to the city. Be it student accommodation, residential development opportunities or large-scale PRS developments, Birmingham is now firmly on the investment agenda. As further blue-chip corporate tenants relocate to the city, infrastructure improvements come to light and development sites are brought forward, we expect this trend of inward international investment to continue.”
According to Knight Frank research, 22.3% of full time Higher Education Students currently studying in Birmingham are international students (15/16). Since 2007, applications to the institutions have increased by 76.2%, going from 61,820 in 2007 to the 108,905 figure recorded in 2016. It said the city remained undersupplied in terms of student housing, with 41,525 (65.8%) students unable to access purpose-built accommodation of any kind.