Blackstone swoops on UK student housing platform for €5.5b

Global private equity giant Blackstone has acquired iQ Student Accommodation from Goldman Sachs and the Wellcome Trust for £4.66 bn (€5.5 bn).

The transaction is the largest ever private real estate transaction in the UK and subject to regulatory approvals.

James Seppala, head of real estate Europe at Blackstone, said: 'This acquisition is a continuation of our strategy to invest in high-quality assets and businesses in the UK and testament to our long-term belief in the UK.

'British higher education is globally renowned and we are delighted to invest meaningful capital to support iQ’s further growth and continue to deliver the highest quality accommodation for students across the country.'

The platform was created in 2006 with Wellcome as one of the founding investors, and merged with Goldman Sachs' student housing business in 2016.

Today the company owns and manages more than 28,000 beds across the UK, with a focus on Russell Group cities, and with a development pipeline in excess of 4,000 beds. According to iQ, it is the largest owner of student accommodation in London, with significant holdings in Manchester, Leeds, Sheffield, Edinburgh and Birmingham.

Growth plans
Rob Roger, iQ's CEO, said: 'I am delighted to be working with a partner of Blackstone’s calibre, as we continue to deliver our ambitious growth plans.

'I’d like to thank Goldman Sachs and Wellcome, whose support has allowed iQ to grow into the world-class business it is today; with a market-leading portfolio concentrated in those cities of strongest student demand, and a unique student accommodation experience that sets us apart.

'With student numbers in the UK at an all-time high, and growth set to continue in the coming years, there has never been a more exciting time to be a leading player in the student accommodation sector.'

Richard Spencer, managing director at Goldman Sachs, said: 'Over the course of our ownership, iQ has become the UK’s leading provider of high-quality student accommodation.

'The company’s focus on customer service and continued investment in the platform has enabled iQ to become a leader in the sector and provide an outstanding experience to students. We are proud to have been part of that journey alongside iQ’s excellent management team and our valued partners at Wellcome.'

Peter Pereira Gray, CEO and managing partner, investment division, Wellcome, said: 'Wellcome has invested steadily in iQ from its inception 14 years ago. Over this time, including most recently in partnership with Goldman Sachs, iQ has grown to become one of the best student housing companies in the UK.'

Goldman Sachs International, Morgan Stanley & Co and Eastdil Secured served as financial advisors to the sellers and Jones Day as legal counsel.

Bank of America and Citi served as financial advisors, while Savills served as property adviser to Blackstone, and Kirkland & Ellis and Gowling WLG served as legal counsel.

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