Barings has acquired a purpose-built student accommodation (PBSA) scheme in London for £101.1m on behalf of a European value-add real estate strategy and in a joint venture with Rosethorn Capital.
Purchased from CLS Holdings, Spring Mews is a stabilised, 378-bedroom PBSA scheme in Vauxhall consisting of 306 clusters and 72 studios, with strong amenity provision such as co-working space, a gym, pool, a cinema/games room and outdoor space exclusive to residents. The development – managed by Fresh – benefits from a high-quality design and fit-out, and features a BREEAM Very Good certification and an EPC A rating.
“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.”
Ben Pile, Head of European Residential Investment and Asset Management, Barings Real Estate
Spring Mews is located in Vauxhall, an established PBSA micro-location and a five-minute walk from Vauxhall Station located in London’s Zone One, which offers easy connectivity within 25 minutes to world-class universities including King’s College London, LSE, UCL and Imperial. There are 232,900 students within the catchment for Spring Mews, according to Bonard.
“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.”
Rory Allan, Managing Director and Portfolio Manager, Barings Real Estate
Rosethorn, a newly formed asset manager of PBSA across the UK, will manage Barings and Rosethorn Capital’s Spring Mews scheme, with a business plan aimed at maximising rental income and minimising operating expenditure.
“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.”
Stephen Rigby, CEO, Rosethorn Capital
