London investor spends £13.3m on student development

A STUDENT property development has been bought by London investors for £13.3m.

Investra, which targets “strong micro markets”, has acquired the 111-bedroom Kensington House on Suffolk Street Queensway, between The Mailbox and The Bullring.

It believes there are opportunities to “capitalise on the strong Birmingham market” despite the property being established in the market.

Rupert Strutt, from Knight Frank Student Property, who acted on behalf of vendor Birmingham Properties Group, said: “In a complex market this deal demonstrates the strength of investment appetite from investors from across the globe for quality student accommodation in Birmingham.”

The recently-refurbished development offers an estimated gross income of in excess of £1m for 2016/17 and the deal represents a net initial yield of 6.60%. The freehold asset also has three ground floor commercial units.

John Tebbutt, managing director of Birmingham Properties Group, added: “There was competitive bidding for Kensington House which we have owned since 2011 showing that the group’s foresight to purchase an underperforming asset in the recession was prudent.

“We always felt the reorientation and redevelopment of New Street, together with the improving Mailbox story, made this location very attractive.”