Student accommodation developer Unite has added a 2,100 beds to its portfolio for £271m.
The eight properties, acquired from Bahrain-based Ahli United Bank, span seven towns and cities, including three new locations for Unite.
Leeds’ Broadcasting Tower, which comprises 241 beds, and a 356-bed development in York named The Boulevard, are among the assets.
It brings Unite Students’ portfolio to just under 27,000 beds in 76 buildings across 25 cites.
Of the eight assets included in the deal, five are located in areas where Unite already has a presence - Leeds, Birmingham, London and Glasgow.
Additional properties in York, Durham and Oxford have enabled Unite to expand into new markets with potential for growth.
The acquisition was made through the Unite Students Accommodation Fund (USAF), in which the firm holds a 22 per cent stake as the largest investor.
The deal was completed with funds from USAF’s latest round of capital raising. The fund’s property portfolio was boosted 16 per cent from £1.64bn to £1.91bn as a result of the deal.
Initial yield for the acquisition is five per cent, rising to 5.6 per cent over a two to three years period.
Analysts at Sanlam noted the deal could potentially boost Unite’s earnings by six per cent.
Richard Simpson, managing director of property at Unite, told The Yorkshire Post that the firm is “geared for growth” to meet increasing demand for student accommodation.
Student numbers have doubled in the past 25 years to around 1.8 million people studying in the UK and are set to continue, he said.
Mr Simpson said: “There is great scope and demand for the growth of our business.
“The acquisition of this portfolio is entirely in line with our longer-term growth strategy.”
While interest in student accommodation developments is rising rapidly, Mr Simpson said continued demand puts fears of a growth bubble to rest.
He said: “If you look at purpose-built student accommodation for those students, there’s just over half a million bed spaces. You’ve roughly got a ratio of around three to one in terms of demand relative to available spaces.”
Increasing the availability dedicated student premises may also help address the housing crisis, he added.
He said: “What tends to happen is the vast majority of students end up living in the private rented sector, typically in houses of multiple occupancy (HMO)-type accommodation, which is obviously preventing families being able to occupy and live in those bedsits and terrace houses.
“The development of more purpose-built student accommodation is not only providing good quality, managed accommodation for that demand, but it is also alleviating pressure on the private rented stock in any given town or city across the UK.”
Unite is currently looking to acquire new development sites and is targeting 8,000 additional beds in the next three to four years, he said.
The firm, which saw recurring profits up 44 per cent to £33.3m in 2014, said may also look to further acquisitions.
“We are certainly keen to grow, based on the fundamentals of the sector and the demand, and we do have further capital available for further purchases of investment stock,” he added.
Maan Investments is set to convert a A Grade-II listed building in Leeds is set into student accommodation by.
Planning permission has been granted to turn Burley House into one- and two-bedroom apartments and studios, to be completed by summer 2016.
The project has been designed by Headingley-based Brewster Bye Architects with advice from Indigo Planning.
Brewster Bye director Chris Austin said: “This is a very prominent site on the corner of Clarendon Road in a conservation area that maintains much of its original outlook and character.”