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Cordea Savills exits £137m student halls portfolio

The London-based manager has sold the assets of its Student Hall Fund to UK operator Unite. The Cordea Savills Student Hall Fund was a pioneer in the student housing sector being the first pooled investment vehicle to attract UK institutional money to the asset class.

Cordea Savills, the London-based property fund management firm, has sold all the assets in its student accommodation fund for £137 million (€172 million; $234 million) to UK operator of student halls, Unite.

The deal is noteworthy because Cordea Savills says its Savills Student Hall Fund was a pioneer in the student sector having become the first pooled investment vehicle to attract UK institutional money to the sector in 2006.

Cordea’s fund was launched as an eight-year vehicle and the portfolio comprises 2,904 bedrooms stretched across nine assets in UK cities including Edinburgh, Bath, Bristol, Loughborough, Leeds and Birmingham.

The purchaser, Unite, is buying them on behalf of the Unite UK Student Accommodation Fund (USAF), which is Europe’s largest non-listed real estate fund that purely focuses on student accommodation investment assets. It is an open-ended, infinite- life vehicle, meaning the exit for Cordea’s Fund coming to the end of life cycle has proved to be an evergreen fund operating in the same sector.
James Whidborne, portfolio manager at Cordea Savills, said in a statement: “Following a strong marketing campaign, the sale of the Student Hall Fund has allowed Cordea Savills to take advantage of a buoyant market. Despite recent increases in tuition fees, the sector has remained robust and the fund’s original investment thesis has proved correct.”

He added: “Cordea Savills is comfortable that now is a good time to exit but will maintain a watching brief over the sector.”

James Hanmer of Savills who acted on behalf of Cordea Savills added: ‘This is another example of investor demand for UK student accommodation. The marketing campaign for the portfolio went through two rounds of bids and ultimately USAF was selected on the basis of its credibility and ability to transact.’