Singapore Press Holdings (SPH), has acquired £133.7 million ($175.3 million) worth of student housing assets in the UK, allowing the publisher turned property developer to increase its portfolio of UK university accommodation by 1,243 beds to 5,059, the company announced on Tuesday.
SPH’s latest purchase, which brings its footprint in the asset class to 20 properties across 10 cities in Great Britain, is the company’s fourth acquisition of UK student housing in the past eight months, after it bought a portfolio of 14 student accommodation properties located in six towns and cities across the country last September. In February and March this year the company added one property each in the cities of Lincoln and Glasgow.
The investment also marks the fifth major purchase of UK student housing assets by Singaporean players since 2016 with some of the country’s largest investors investing in over £1 billion in projects in the market segment in England, Wales and Scotland in just over three years.
Buying Student Beds in Three Cities
Singapore Press Holdings’ new acquisition includes three separate complexes — one each in the English cities of Southampton, Sheffield and Leeds. The Southampton property is a leasehold asset, while the other two complexes were purchased as freehold properties.
In a statement to the Singapore exchange the company best known for publishing Singapore’s Straits Times said that one of its wholly-owned subsidiaries is purchasing the Hampton Square, Sharman Court and Asa Briggs House properties from sellers Habitus Holdings, Privilege Holdings, Privilege Southampton Holdings and AIGGRE Europe Real Estate Fund I GP without specifying the existing distribution of the assets among the sellers.
“These acquisitions are high quality, cash-yielding assets in key student cities in the UK and will enhance our recruiting income going forward,” Ng Yat Chung, CEO of Singapore Press Holdings said in the statement, adding that, “We remain disciplined in our acquisition pipeline, to build our UK PBSA portfolio to a platform of scale.”
The transaction includes a rental guarantee that covers the 2018-2019 and 2019-2020 academic years, with all three properties said to enjoy occupancy rates of over 90 percent. Southampton, Sheffield and Leeds are all significant university towns in the UK.
In its statement to the exchange SPH, cited research on the UK student housing sector by property agency Knight Frank in emphasising that the higher education system in the UK is well-placed to grow, backed by rising demand from both local and international students. “With a healthy student-to-bed ration, the asset class has demonstrated strong rental growth over the years,” it added.
SPH Keeps Adding to UK Student Homes
Including its recent acquisition of 380 beds in Lincoln and Glasgow, SPH’s UK student accommodation portfolio has achieved a total capacity of over 5,000 beds across 20 assets in 10 cities, valued in excess of S$600 million.
“With an enlarged platform, SPH can extract greater economies of scale and has started operationalizing its asset management capabilities under the new Capitol Students brand,” the company said in the statement.
SPH made its first purpose built student accommodation investment in UK last September by acquiring a set of 14 assets in London, Birmingham, Bristol, Huddersfield, Plymouth and Sheffield for $233 million in cash. Since that time it has now completed another three acquisitions in the UK .
In February of this year the company bought the St Marks property in the city of Lincoln for an undisclosed amount and followed up in March by purchasing the Clifton and Stewart House in Glasgow, Scotland, with both purchases said to be made at cap rates of around 6 percent according to analysts at UOB Kay Hian Securities.
Following the GIC Trail
SPH’s latest deal comes just one month after Singapore-listed property developer Far East Orchard Limited, a unit of Far East Organisation, paid £55 million to purchase three freehold student housing properties in Bristol and Liverpool.
Both SPH and Far East Organisation are following a trail blazed by Singapore’s sovereign wealth fund, GIC, which teamed up with Dubai-based Global Student Accommodation Group (GSA) in 2016 to buy a portfolio of UK student housing projects from funds managed by Oaktree Capital Management at a price estimated to be in the range of £430 million.
In 2017 GIC followed up by investing in a £227 million ($283.5 million) joint venture to purchase a student housing complex at Aston University in Birmingham, England.