Singapore Press Holdings Limited (SPH)has entered into a sale and purchase agreement with Habitus Holdings S.À R.L., Privilege Holdings S.À R.L. , Privilege Southampton Holdings S.À R.L. and AIGGRE Europe Real Estate Fund I GP S.À R.L to acquire a student housing portfolio of Purpose-Built Student Accommodation (PBSA) assets in the UK for a cash consideration of approximately £133.7 million (approximately S$237.0 million).
The portfolio spans 3 cities in the UK and has a total capacity of 1,243 beds. They are situated in Southampton, Sheffield and Leeds, which have sizeable full-time student populations and enjoy strong occupancy rates in excess of 90.0%.
The portfolio comes with a rental guarantee that covers the 2018/2019 and 2019/2020 academic years. This provides earnings visibility as SPH integrates the assets into its current portfolio of PBSA managed assets.
Adding to the recent acquisition of 380 beds in Lincoln and Glasgow, SPH’s PBSA portfolio has a total capacity of over 5,000 beds across 20 assets in 10 cities. The AUM is now in excess of S$600 million, establishing SPH as a leading PBSA player in the UK.
With an enlarged platform, SPH can extract greater economies of scale and has started operationalising its asset management capabilities under the new Capitol Students 2 brand. SPH has developed on-ground operational expertise, with a dedicated team of 5 in the UK, 8 in Singapore overseeing the portfolio together with more than 100 employees managing the assets.
Sales and marketing capabilities have also been expanded, with a centralised marketing and sales office. A community portal is also being developed for the 2019/2020 academic year, supported with backend business processes and booking systems. The portal is envisaged to define the students’ experience and be the connection through which Capitol Students partners the institutions and parents on the students’ lifeshaping campus journey.
The world class higher education system in the UK is well-placed to grow, backed by rising demand from both local and international students1. With a healthy student-tobed ratio, the asset class has demonstrated strong rental growth over the years2.
Mr. Ng Yat Chung, Chief Executive Officer of SPH, said: “Since our first PBSA investment in September 2018, we have now successfully completed four acquisitions in the UK. These acquisitions are high quality, cash-yielding assets in key student cities in the UK and will enhance our recurring income going forward. We remain disciplined in our acquisition pipeline, to build our UK PBSA portfolio to a platform of scale.” This transaction was completed on 16 April 2019.