US investment manager Harrison Street has announced the sale of seven purpose built student accommodation (PBSA) assets to Global Student Accommodation (GSA), the student housing specialist, for an undisclosed amount.
The transaction combines the sale of Harrison Street’s interest in six assets held in an existing joint venture partnership with GSA, and the sale of Scotway House, Glasgow, which was held in a joint venture partnership with Structured House Group.
Located in top-tier university cities across the UK, the portfolio consists of 2,171 beds serving students attending City University of London, London School of Economics, Newcastle University, Northumbria University, University of Lincoln, Nottingham Trent University, Sheffield Hallam University, University of Exeter, and University of Glasgow.
Paul Bashir, Chief Executive Officer of Harrison Street Europe, said, ‘We are pleased to have completed the sale of these seven, high-quality PBSA assets, which serve students at leading universities and institutions throughout the UK, in a portfolio with one of the stronger operational track-records to have transacted in the past year. GSA Group is a trusted and highly valued partner for Harrison Street as well as a best-in-class developer and manager of PBSA globally. We are confident they will be excellent stewards of these properties going forward.’
Bashir continued, ‘Importantly, through the sale of these seven assets, Harrison Street’s first alternative European fund, a late-2015 vintage, will now become fully realized in just over six years after making its first investment and has generated returns well ahead of target. We believe this further demonstrates the attractive opportunity within our sectors of focus throughout Europe and the differentiated investment opportunities we offer our investors.’
James Hunt, Global head of Real Estate at GSA, said, ‘GSA remains a firm advocate of the resilience of the student housing sector in the UK and I am delighted to be taking full ownership of our assets following a successful joint venture with our long-term partner Harrison Street. As well as unlocking long-term potential and generating secure returns, this transaction is an opportunity to deploy our growth strategy in the market with the acquisition of Scotway House. Additionally, bringing this market-leading asset into our global portfolio allows us to expand our partnership with GSA’s global operating partner, Yugo, to further support the students we house.’
The transaction follows several recent strategic portfolio sales for Harrison Street including the $2 bn sale of two separate student housing portfolios to GSA and The Scion Group comprised of 37 properties and nearly 24,000 beds.
Since launching its European strategy in 2015, Harrison Street has acquired or developed 70 assets, including over 18,000 student accommodation beds and approximately 3,000 residential units and 2.1 million sq ft of life sciences space in partnership with 14 operating partners in the UK, Ireland, France, Germany, and Spain. Additional investments in the near-term pipeline are anticipated to expand the firm’s footprint to The Netherlands, Denmark, Italy and Portugal.
In February 2022, the firm announced the final close of its third European alternative real estate fund, Harrison Street European Property Partners III, SLP RAIF, which raised over €800 mln of equity, including co-investment vehicles.
Jones Lang LaSalle Limited, DLA Piper UK and Deloitte advised Harrison Street and its JV partners during this transaction.
GSA were advised by CMS Cameron McKenna Nabarro Olswang and PricewaterhouseCoopers.