Watkin Jones has announced the exchange of contracts for the sale of The Tannery – a purpose-built student accommodation (PBSA) scheme in Leicester. The transaction is on a forward commitment basis to Deutsche Finance International (DFI) for c.£35.6m and represents DFI’s second purchase of a PBSA scheme in the UK. DFI is the pan-European private equity real estate investor which manages over €2.7bn of assets and specialises in customer-centric real estate.
“It’s brilliant to secure institutional investment for this superb scheme that only adds to the growing desirability of Leicester’s dynamic riverside area. What was a brownfield site in need of regeneration will shortly offer hundreds of residents a really attractive place to live with easy access to two respected universities, as well as the shops, bars and cafés of the city centre.
“The success of this second PBSA scheme alongside our upcoming Build to Rent offer in Leicester showcases our ability to meet the very strong institutional and resident demand for UK residential for rent. The country’s growing market of renters increasingly value great homes with in-built lifestyle and welfare provision, while institutions are seeking high-quality assets that offer strong long-term returns.
“Working with DFI for the first time to complete this sale has been a real positive and the team look forward to continuing our relationship into the future. My thanks go to everyone involved in making the deal happen.”Alex Pease, Chief Investment Officer, Watkin Jones
The Tannery PBSA development includes 462 student beds – a mix of 47 studios and 415 ensuite rooms. Amenities include a cinema and games room, lounges, study areas and a fitness studio.
The scheme is located on All Saints Road between the city centre and riverside. The Tannery is being delivered in-house by Watkin Jones and is due to complete in time for the start of the 2021 academic year.
“This off market transaction represented a compelling opportunity for us to build on our UK student accommodation exposure and take advantage of the current market dislocation with the acquisition of one of the few newly constructed PBSA assets in Leicester.
“Watkin Jones is one of UK’s leading developers and we are confident that they will deliver a high quality, modern product ready for the 2021/22 academic year. The outlook for the UK student sector remains strong, with supportive demographics and growing domestic and international demand.”Paul Nearchou, Investment Director, DFI
The Tannery received support during the planning process from the nearby De Montfort University and sits directly adjacent to the highly successful Merlin Heights PBSA scheme developed by Watkin Jones in 2016. It also neighbours a further Watkin Jones Build to Rent scheme currently in development and highlights the riverside area’s growing appeal. Once The Tannery is completed, it will be managed by Fresh – Watkin Jones’ specialist asset management company.
“Winning the management of The Tannery for Fresh builds on the momentum we have already seen in early 2021. It is absolutely fantastic to be working with a new institutional client in Deutsche Finance International who we hope to partner and grow with in the coming years. As you would expect from the amazing teams here at Fresh, we’ve already started marketing the property and can’t wait to welcome our first residents later in the year.”Jeremy Fletcher, Chief Executive, Fresh