Hull-based student accommodation provider Kexgill has bought a large office block in Nottingham as it adds to the £183.4 million of assets now held.
Raleigh House,a 20,000 sq ft building, is a £2.4 million addition that will be converted into a 57-bed property. It sits close to Nottingham Trent University City Centre Campus.
It has been acquired as the company’s latest results were filed for the year to June 2022, with the physical return of students to lectures across the UK welcomed.
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Kexgill, launched in the city by a former student keen to offer better than he had experienced, saw its gross asset value increase by 16 per cent from £158 million in the last financial year. It has concentrated on increasing its prime location status, with all property now considered that or good, with particular attention paid to Nottingham and Liverpool, as well as the home city.
Richard Stott, managing director of the Kexgill Group, told how the prospects were looking good with a “shortage of good quality opportunities and no expectation of a fall in demand” despite economic headwinds. Forward letting is ahead of previous years for September, despite rental increases to cover the all-inclusive model that factors in energy bills. The company portfolio is described as sitting in the medium range of rental values.
Kexgill is also just refinanced 55 residential student units at various locations via a £25 million facility provided by InterBay Bank. Both transactions were supported by fellow Hull firm Andrew Jackson Solicitors, with property partner Helen Mellors leading.
Richard Stott, managing director of the Kexgill Group, said: ““This latest purchase required careful negotiation over a lengthy period of time and I am delighted that Helen and the Andrew Jackson team were able to help us achieve preferred developer status for Raleigh House. We are now looking forward to ensuring that the premises receive the Kexgill treatment as we add to our existing portfolio of high quality, affordable student accommodation in Nottingham.”
Turnover increased 6.4 per cent from £12.5 million to £13.3 million in the latest results, with operating profit dipping slightly from £2.5 million to £2.2 million. Employees stayed fairly constant, at 91.
Looking ahead, further acquisitions are anticipated.
Mr Stott said: “We prefer the smaller bespoke model including office conversion, for our expansion mainly in existing locations, and thus benefiting from economies of scale. Our track record is 11 office to student conversions completed in the last four years.”
The Nottingham acquisition follows Larch House and Heritage Court in Liverpool, as well as Antibo and 14 Clarendon Street in Nottingham. The period also saw a further four terrace houses in the Hull University Quarter acquired.
Ms Mellors, who was supported by Andrew Jackson partners Fiona Phillips (corporate) and Nick Dean (property litigation), said: “Kexgill is a long standing client and we are particularly delighted to have assisted Richard and his team on the group’s latest transaction, and to support their continued growth in the student accommodation sector.”
It comes as newly-built properties which are home to popular international food operators on a £12 million Nottinghamshire regeneration development have been purchased by Hull-based commercial property specialists Garness Jones on behalf of an investor.
Mansfield's Stockwell Gateway development has been built by ARBA Property Group on the site of a former bus station.
The investment, for a family trust, follows a similar previous acquisition by Garness Jones for the same client last year, building upon a long-term relationship in which the investments team actively seeks out suitable new opportunities.
The occupiers of the three standalone units are restaurant chains Taco Bell, Tim Hortons and Dominos and is described as having the security of solid covenants, and being on a site which is expected to have further investment and development on a second phase and nearby.
“This is an acquisition which really reflects our ability to be aware of what is happening in the commercial property market, as excellent opportunities can arise out of new developments such as this one,” said David Garness, who has overseen the deal on behalf of the investor.
David Stone of Rollits advised on the purchase.
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