International legal practice Osborne Clarke has advised Arlington and Equitix on a joint venture acquisition of ‘The Stellar Portfolio’ of 1,857 beds of purpose-built student accommodation (“PBSA”) from Fusion Students.
The acquisition, together with the related acquisition of ‘Merlin Heights’ in Leicester, is one of the largest UK student accommodation deals agreed during 2018, according to Knight Frank. The deal brings the total number of PBSA beds under Arlington’s management to 12,700, making it the largest independently owned and 6th largest overall student accommodation platform in the UK.
‘The Stellar Portfolio’ features four best-in-class PBSA assets and was sold for more than the £232m asking price. The buildings, which total 1,857 beds, are centrally located in the key Russell Group university cities of Newcastle, Nottingham, Cardiff and Bristol. The portfolio is currently operated by leading student accommodation operator Collegiate AC.
The transaction was financed by £200m of senior debt which was advanced by a single institutional investor with a 44-year maturity, and becomes Arlington’s seventh long-dated debt issuance in the last four years. The project benefitted from a strong project finance credit rating, making this the first direct-let student accommodation acquisition in the UK to have secured such rating.
Arlington and Equitix were jointly advised by Grant Thornton and TradeRisks. Knight Frank’s Student Property team acted for Fusion Students.
The Osborne Clarke team who advised on the transaction (including the joint venture, acquisition and financing) was led by Legal Director Sarah Knight. Sarah led the corporate work and deal management, she was supported by a significant team including; Partner Andrew Normington on the financing aspects and Partners Tracey Wright on tax and Chris Wade who is client relationship manager for Arlington and Equitix.
With over 250 years of property expertise, Osborne Clarke’s Real Estate and Infrastructure sector team is a recognised industry leader in the student accommodation sector. The team works with pan-European clients and currently acts for five of the top student accommodation providers in the UK, specialising in structured acquisition as well as corporate and project finance.