Bangor-based developer and manager in the rental accommodation sector, Watkin Jones, has secured a forward funding deal for a major student scheme in Bristol.
The Alternative Investment Market listed business has exchanged contracts with global investment firm KKR for it to deliver a 819 bed purpose-built student accommodation (PBSA) scheme which on completion will be leased by KKR to the University of Bristol on a long-term basis.
The development, in Dalby Avenue in the Bedminster area of the city, is due for completion in August next year. The forward funding includes a initial net cash payment from KKR to Watkins Jones of £20m. Further payments will be released over the construction period.
Alex Pease, chief investment officer, Watkin Jones, said: “We are delighted to have secured our second deal with KKR, and would like to thank them for their efforts and partnership approach in reaching this agreement. This is an exciting opportunity to develop a key area of regeneration in the Bedminster area of Bristol for the ever-growing student needs in the city.
Watkin Jones has a strong track record of developing PBSA schemes in Bristol as rising demand continues, including work recently completed at Wilder Street and Unity Street last year, in addition to work currently underway on a PBSA site on Gas Lane.
We are really excited as Bristol is widely regarded as one of the UK’s top university towns for education but also it represents one of the most vibrant and inclusive cities for students to live. Offering a wide range of bars, shops, and restaurants, it is a city for students to enjoy.”
Seb d’Avanzo, managing director and head of real estate acquisitions for KKR in Europe, said: “We’re delighted to be investing in this well-located PBSA scheme which will deliver exceptional-quality accommodation for one of the UK’s top universities. Watkin Jones is a leading developer and manager in the sector, and we are pleased to undertake another attractive venture with Alex and his team. The student housing market has compelling and resilient fundamentals and this property benefits from a long-term lease, making it a good fit for our core plus real estate strategy and our growing ambitions in the student housing sector.”
Watkin Jones were advised by Cushman & Wakefield and Addleshaw Goddard. KKR were advised by Bryan Cave Leighton Paisner.
Watkin Jones’s other live projects include a 370 bedroom student development in Swansea which is being forward funded by EQT Exeter. The Ty Nant scheme is on track to be ready for occupancy in September.
In Cardiff it is also on site at the Central Quay mixed-use development scheme, which overlooks the River Taff at the former Brains brewery site, for the first phase of a 700-plus build to rent project for L&G.
Since 1999, Watkin Jones has delivered 48,000 student beds across 143 sites, making it a key player and leader in the UK’s PBSA market.
For the first half of its current financial year to the end of March, Watkin Jones posted revenues of £153.6m in line with expectations with a strong second half anticipated.
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