Watkin Jones sells Bristol PBSA scheme to KKR

Watkin Jones sells Bristol PBSA scheme to KKR

British residential property developer Watkin Jones has exchanged contracts with funds managed by global investment firm KKR to forward fund an 819-bed purpose-built student housing (PBSA) scheme in Dalby Avenue located in Bedminster, Bristol.

The consideration will be payable to Watkin Jones over the course of the development, which is due for completion in August 2024, and includes an initial net cash receipt for Watkin Jones of c. £25 million.

KKR is making the investment through its European Core Plus Real Estate strategy, which focuses on thematic investments in high-quality, substantially stabilised assets with long-term growth potential.

Upon completion, the 819-bed scheme will be fully leased to The University of Bristol on a long-term basis. The development will deliver a mix of 5-12 bed cluster flats together with c.15,000 sq.ft. of internal amenity space and considerable external amenity space including a private terrace, courtyard, and gardens. The site has excellent transport links to the University campuses and is conveniently located close to Bedminster train station and within walking distance to Bristol’s city centre.

Bristol is the UK’s greenest city, and the scheme is sustainably designed, and is targeting BREEAM ‘excellent’ rating. Additionally, best-in-class delivery and execution for residents will be available when it comes to enjoying a technology-enabled experience as the development is targeting WiredScore Silver. Attractive landscaping will support and encourage local biodiversity and residents will enjoy outdoor communal amenity space including a courtyard, high quality public realm and access to the newly restored Malago River corridor.

Alex Pease, Chief Investment Officer, 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 also it 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.”

Seb d’Avanzo, Managing Director and Head of Real Estate Acquisitions for KKR in Europe, commented: “We’re delighted to be investing in this well-located PBSA scheme which will deliver exceptional-quality accommodation for one of the UK’s top universities. Watkin Jones is a leading developer and manager in the sector, and we are pleased to undertake another attractive venture with Alex and his team. The student housing market has compelling and resilient fundamentals and this property benefits from a long-term lease, making it a good fit for our Core Plus Real Estate strategy and our growing ambitions in the student housing sector.”

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