UPP achieves financial close of US$180 million student accommodation project

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UPP achieves financial close of US$180 million student accommodation project

University Partnerships Programme (UPP) has announced that it has successfully reached financial close on a GBP139.7 million (US$178.1 million) deal with the University of Exeter on its East Park project.

The deal will see UPP design, build, fund and operate 1,182 high-quality bedrooms on the University’s Streatham Campus, located in south-west England. The scheme will comprise a mixture of standard, en-suite and enhanced accessible bedrooms and will represent the largest build of on-campus accommodation at the University since 2012.

On completion, UPP will operate over 4,000 rooms on the University of Exeter campus. The deal boosts UPP’s portfolio to over 35,000 rooms in operation or under construction through long-term partnerships with 15 leading UK universities.

The investment will include GBP125.1 million (US$159.5 million) of index-linked debt financing with a tenor of circa 48 years from Pension Insurance Corporation plc (PIC), the specialist insurer of defined benefit pension funds, and GBP14.6 million (US$18.6 million) of subordinated debt and equity provided by UPP Group and its Shareholders.

UPP has appointed Vinci Construction UK Limited to deliver the development, which has a construction value of GBP91 million (US$116.0 million).

Construction of the East Park development is scheduled to commence in January 2019, with the rooms set to become operational over two phases in September 2020 and September 2021.

It is the third on-campus scheme currently underway between UPP and the University of Exeter, with the GBP41.4 million (US$52.8 million) Moberly and Spreytonway projects – consisting of 250 and 131 beds respectively – already under construction and due for occupation by September 2020.

PIC’s investment in the project is the sixth it has completed with UPP on a bilateral basis, taking the total that the company has invested directly in UPP schemes to circa GBP530 million (US$675.8 million), attesting to the resilience of student accommodation as an asset class for investors.

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