Barings and joint venture partner Rosethorn Capital have acquired a purpose-built student accommodation (PBSA) scheme in London for £101.1m from CLS Holdings.
Spring Mews is a stabilised, 378-bed PBSA scheme in Vauxhall providing 306 cluster rooms and 72 studios. The scheme’s onsite amenity provision includes co-working space, a gym, pool, a cinema/games room and outdoor spaces for residents.
Rosethorn, a newly formed asset manager of PBSA across the UK, will manage the scheme.
Ben Pile, head of European residential investment and asset management at Barings Real Estate, said: “One of the world’s best cities for students, London is nevertheless significantly undersupplied with quality accommodation, and with delivery falling, this shortfall is likely to deteriorate over time. Spring Mews is an institutional-grade, stabilised asset that benefits from an excellent location, and therefore proved to be a compelling acquisition opportunity as we seek to expand our exposure to the living sector – in London, the UK and across Europe – on behalf of our capital sources. We are excited to be working with sector specialist, Rosethorn Capital, as they launch their new business.”
Rory Allan, managing director and portfolio manager for the European closed-end value-add real estate fund series at Barings Real Estate, added: “Spring Mews represents a rare opportunity to acquire a cash flow generating PBSA asset in a prime central London location with its severe supply/demand mismatch which is expected to continue to generate above trend rental growth. The investment is projected to deliver strong risk adjusted returns through asset management driven NOI optimisation with downside protection.
“This is the third acquisition in as many months for our value add fund strategies, all of which have been in the living sector, which is a primary focus at this current point in the cycle considering the sector’s resilient qualities. We have a deep pipeline of further investments as we look to take advantage of opportunities thrown up by wider macro volatility and dislocation.”
Stephen Rigby, CEO of Rosethorn Capital, said: “We are thrilled to have completed the deal in partnership with Barings. The acquisition is a significant milestone for us as a new business, and one that will serve as a fantastic springboard for future growth. The market remains very challenging, and I’m extremely grateful for all the hard work and commitment from my team and our advisors, as well as the collaborative approach from CLS Holdings.”
