UK: Real estate investment manager Curation Capital has bought a 416-bed PBSA asset in Newcastle’s Quayside area.
The property offers a mix of accommodation, with 85 per cent en-suite rooms and 15 per cent studios, with on-site amenities including a cinema room, laundry facilities and bicycle storage. Newcastle is home to Newcastle University and Northumbria University. The city has a total student population exceeding 52,000 and a low student-to-bed ratio of 2.53.
Curation Capital, a subsidiary of Steyn Group, has been active in the UK PBSA market recently acquiring operational assets in London, Manchester, Nottingham and Birmingham in partnership with Patron Capital. It acquired the Newcastle asset from IP Investment Management (IPIM), a Hong Kong-based living sector real estate fund manager. IPIM bought the building in 2018 as a value-add investment, adding 30 additional beds to the PBSA scheme and replacing the operator.
To date, IPIM has acquired or developed more than 2,740 PBSA beds totalling over £315 million of institutional quality PBSA asset in 11 UK regional markets. Previous to this disposition, the company sold two fully stabilised PBSA developments to Brookfield in Q4 2021 and Q1 2022.
Knight Frank’s Student Property team advised the vendor, in the transaction.
Michael Haverty, partner at Curation Capital, said: “We are delighted to have acquired our first PBSA asset in Newcastle, the city’s market dynamics present an attractive business case. This acquisition allows us to continue to expand and diversify our UK student accommodation portfolio. We look forward to working closely with our development and operational partners, Forge Development and Almero Student, on the repositioning of this asset.”
Selina Williams, executive director at IPIM, said: “We are pleased to have worked with the team at Knight Frank to successfully execute the sale of this high-quality PBSA asset in Newcastle. The property has performed well and attracted strong interest from investors, reflecting the positive fundamentals of the UK student housing market. This transaction represents an attractive outcome for our investors, and we look forward to exploring new opportunities to continue growing our PBSA portfolio.“
The puchase was faciltated by a £33 million loan provided to Curation Capital by Leumi UK. Christopher Stallard, relationship director at Leumi UK, said: “We are pleased to complete our fourth deal with one of our longstanding clients, Curation Capital. Our continued partnership is a great indication of the support we provide to our clients. This is especially crucial in the student accommodation sector, where timely completion is essential to accommodate students before the start of their first term at university. Newcastle has two highly regarded universities and is a market that is underserved in purpose-built student accommodation, with Savills estimating that around 3/5 of full-time students are not catered for.”
Haverty added: “Once again, collaborating with the Leumi team has been an absolute pleasure as they continue to demonstrate a clear understanding of our business objectives, project goals and timelines. Their personalised approach ensures fast and reliable responses, coupled with the expert knowledge essential for efficiently closing our deals. This was particularly important in this circumstance as they successfully closed the deal within just four weeks.”
