Watkin Jones’ Bristol PBSA forward sold to KKR

Watkin Jones exchanges contracts with KKR to forward fund its purpose-built student accommodation scheme in Bristol.

Watkin Jones’ Bristol PBSA scheme, which has been forward sold to KKR | PBSA News
Watkin Jones’ Bristol PBSA scheme, which has been forward sold to KKR.

Watkin Jones has exchanged contracts with funds managed by global investment firm KKR, to forward fund a purpose-built student accommodation (PBSA) scheme in Bedminster, Bristol. Watkin Jones were advised by Cushman & Wakefield and Addleshaw Goddard LLP. KKR were advised by Bryan Cave Leighton Paisner LLP.

Funds will be payable to Watkin Jones over the course of the scheme’s development, with an initial net cash receipt for Watkin Jones of c. £25m. The funds have been invested through KKR’s European Core Plus Real Estate strategy, which focuses on thematic investments in high-quality, substantially stabilised assets with long-term growth potential.

Located on Dalby Avenue, the PBSA scheme is in one of the five key sites identified in Bristol City Council’s Bedminster Green Framework as a priority for redevelopment. It will deliver 819 student beds – a mix of five to 12 bed cluster flats.

The scheme has been sustainably designed and is targeting a BREEAM ‘excellent’ rating, alongside a target of WiredScore Silver for connectivity. The development is expected to complete in August 2024, when it will be fully leased on a long-term basis to the University of Bristol.

“We’re delighted to be investing in this well-located PBSA scheme which will deliver exceptional-quality accommodation for one of the UK’s top universities. Watkin Jones is a leading developer and manager in the sector, and we are pleased to undertake another attractive venture with Alex and his team. The student housing market has compelling and resilient fundamentals and this property benefits from a long-term lease, making it a good fit for our Core Plus Real Estate strategy and our growing ambitions in the student housing sector.”

Seb d’Avanzo, Managing Director and Head of Real Estate Acquisitions, KKR in Europe

The scheme will feature c.15,000 sq ft of internal amenity space and considerable external space will include a private terrace, courtyard and gardens, as well as access to the newly restored Malago River corridor. The attractive landscaping will support and encourage local biodiversity.

Residents will benefit from being nearby Bedminster train station, and within walking distance to Bristol’s city centre. The development also has excellent transport links to the University campuses.

“We are delighted to have secured our second deal with KKR and would like to thank them for their efforts and partnership approach in reaching this agreement. This is an exciting opportunity to develop a key area of regeneration in the Bedminster area of Bristol for the ever-growing student needs in the city.

“The sale is further evidence of the attractive investment and operational fundamentals of both PBSA as a sector and Bristol as a city and a good sign of investment markets re-opening.

“Watkin Jones has a strong track record of developing PBSA schemes in Bristol as rising demand continues, including work recently completed at Wilder Street and Unity Street last year, in addition to work currently underway on a PBSA site on Gas Lane.

“We are really excited as Bristol is widely regarded as one of the UK’s top university towns for education, but it also represents one of the most vibrant and inclusive cities for students to live. Offering a wide range of bars, shops and restaurants, it is a city for students to enjoy.”

Alex Pease, Chief Investment Officer, Watkin Jones

Bristol, considered as the UK’s greenest city, is home to two established universities and is a leading destination of choice for students. However, accommodation is stretched in the city, so this scheme will play an important part in helping to address the on-going and increasing demand for student accommodation.