Watkin Jones, a UK developer and manager of residential for rent, has exchanged contracts with funds managed by KKR to forward fund an 819-bed purpose-built student housing (PBSA) scheme in Bristol.
The total consideration of around £100 mln will be payable to Watkin Jones over the course of the development, which is due for completion in August 2024, and includes an initial net cash receipt for Watkin Jones of £25 mln (€30 mln).
KKR is making the investment through its European Core Plus Real Estate strategy, which focuses on thematic investments in high-quality, substantially stabilised assets with long-term growth potential.
Upon completion, the 819-bed scheme will be fully leased to The University of Bristol on a long-term basis.
The development will deliver a mix of 5-12 bed cluster flats together with 15,000 ft2 of internal amenity space and considerable external amenity space including a private terrace, courtyard, and gardens. The scheme is sustainably designed, and is targeting BREEAM ‘excellent’ rating.
Alex Pease, Chief Investment Officer, Watkin Jones, said: '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.'
Seb d’Avanzo, managing director and head of Real Estate Acquisitions for KKR in Europe, commented: '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.'
Watkin Jones were advised by Cushman & Wakefield and Addleshaw Goddard. KKR were advised by Bryan Cave Leighton Paisner.