- What Unite Group is buying a student accommodation group from CPPIB for £1.4bn
- Why CPPIB’s holdings in the asset class have increased in value dramatically since it debuted in 2015
- What next CPPIB will become a major shareholder in the enlarged vehicle
Student housing giant Unite Group is buying Liberty Living from Canada Pension Plan Investment Board in a cash and shares deal valued at around £1.4bn, React News can reveal.
CPPIB has agreed to sell the company and, as part of the deal, become a major shareholder in the enlarged vehicle. The deal is being priced on a NAV for NAV basis. Liberty Living’s last reported net asset value in Febraury 2019 stood at around £1.4bn.
The Liberty Living portfolio comprises between 20,000 and 25,000 beds and the acquisition takes Unite’s overall UK portfolio to just over 70,000 beds and will help to maintain its publicly stated medium term rental growth aspirations of 3-3.5% annually.
CPPIB originally bought the properties out of the Brandeaux Student Accommodation Fund in 2015 for £1.1bn. The latest deal is one of the largest sales of a student housing platform in the UK to date.
The deal, which will strengthen Unite’s position as one of the largest owners of student housing in the UK, is designed to offer greater choice and price points to university partners and students and comes at a time when student demand in the UK has reached 1.8m people per year, of which 1.5m students require rental accommodation.
It will also mark Richard Smith’s most significant move since his appointment as Unite’s chief executive officer in 2016, following the departure of Mark Allan.
At the time of the 2015 acquisition, Liberty Living, which is one of the UK’s largest student accommodation providers, operated more than 40 residences across 17 university towns and cities in the UK.
However, since then it has grown the portfolio considerably. In 2016, Liberty Living acquired a portfolio of 13 student accommodation properties in the UK, Germany and Spain from Blackstone for £460m. The portfolio comprised 6,484 beds in 12 cities, as well as a development site in London.
Around the same time it bought two further student housing properties in Edinburgh from Ziggurat totalling 532 beds.
Last year, The Unite Group issued a £275m sterling-denominated senior unsecured 10-year debt facility, in part, to fund the company’s development pipeline.
Also, last year, the company announced that that Richard Simpson was to step down from his role as group property director after 13 years with the company. He was replaced by Nick Hayes, who had already been leading the group’s development and property activities.
Established in 2000, CPPIB originally bought Liberty as a vehicle for further expansion into the burgeoning student housing asset class.
Unite Group declined to comment.
