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Greystar, Goldman romp into UK student digs

The largest US operator of student accommodation has teamed up with the principal investment area of Goldman Sachs to buy a portfolio of assets from a collapsed operator for more than £300m.

Two US parties, Greystar Real Estate Partners and Goldman Sachs, have teamed up to invest in the UK student accommodation sector in a deal worth more than £300 million (€356 million; $480 million).

Greystar, the largest US operator of real estate with 215,000 apartments and Goldman Sachs Real Estate Principal Investment Area (REPIA) have bought a portfolio of assets out of collapsed Opal Property Group that was placed into administration in March this year. Completion of the deal is expected by the end of October.

The portfolio comprises 21 assets principally located in London, Manchester, Leeds and Liverpool, and is diversified across a range of tenures including university leased, nominated and direct let. The assets are centrally located within these key university cities, with the deal being the first acquisition by Greystar in the UK. 

Goldman Sachs did not comment, but Bob Faith, founder and chief executive officer of Greystar, said in a statement: “This transaction aligns perfectly with Greystar’s strategy to acquire assets that, while fundamentally sound, will benefit greatly from our organizations track record of repositioning and improving assets in order to provide a superior living experience for our residents.” He added: “While there will be minor operational differences between our US and European assets, we firmly believe the combination of well amenitized accommodations and best in class customer service is a very basic requirement, irrespective of geographic location or culture.”

Brett Lashley, Greystar’s UK managing director, added said: “Our objective is to quickly become a major participant and thought leader in a market providing high quality accommodations for students both in London and the regions.”

Greystar and Goldman Sachs were advised by Macquarie Capital, which also brokered a £1.4 billion transaction in September last year between Dutch pension fund provider PGGM and the UK’s University Partnerships Programme (UPP), a developer and operator of student accommodation. In that instance, PGGM bought 60 percent of UPP from funds managed by Barclays Infrastructure Funds Management (BIFM).

This is not the first time that Greystar and Goldman Sachs has teamed up for an investment. In April, a consortium involving Greystar, Goldman and Ivanhoé Cambridge bought 8,010 units in 27 multi residential properties in the US. That followed an earlier deal when Goldman and Greystar bought assets from Equity Residential in a transaction valued at $1.5 billion.