Hill Dickinson’s corporate and banking teams have advised Liverpool head-quartered developer-operator Downing in connection with securing a £439m investment from an opportunity fund as part of a student housing joint venture.
European Property Investors Special Opportunities IV (EPISO 4), a fund advised by Tristan Capital, has agreed to acquire a 90% stake worth £439m in the joint venture, which owns a 2,756-bed portfolio of six halls in some of the most prestigious university cities across the UK.
The joint venture has also committed to forward purchase two more residences next year, including a prime 32 storey, 578 bed scheme in the heart of Vauxhall London, taking the total number of beds to 3,644.
Downing will retain a 10% stake in the joint venture, which will acquire the eight assets in two tranches. Downing developed all six of the existing halls in Glasgow, Exeter, Leeds, Newcastle, Coventry/Warwick and Edinburgh in the past two years and will deliver the two further developments in Glasgow and London in 2018.
While the majority of the 3,644 beds will be leased directly to students, 11% are leased directly by the universities themselves and an additional 25% are under nomination agreements with these education establishments.
Downing said that the fund investment will provide it with a strong platform for future growth and that it has a vibrant development pipeline, with a number of outstanding key student accommodation developments in prestigious university cities across the country that are due to reach completion over the next five years.
Senior financing for the portfolio was provided by AIG.
Hill Dickinson partner and national head of corporate Craig Scott advised Downing on the corporate aspects of the new investment and joint venture transaction with assistance from corporate partner Jon Gillow and associates Beth Gore and Katy Oakes. Partner and head of banking and finance, Richard Capper and associate Rebecca Layton, also provided Downing with advice in connection with the debt finance aspects of the transaction.
