The accommodation (pictured above) was sold for a total cash consideration of £87.3m to University Partnerships Programme (UPP Group Limited), a specialist provider of on-campus student accommodation infrastructure and support services.
The gross consideration for the leasehold asset was £139.3m, representing a yield of 5.7%, with the cash consideration of £87.3m reflecting the transfer of the associated finance lease creditor.
The disposal will result in the reduction of £5.8m of net rental income compared with 2017, offset by the reduction of £2.1m in finance lease interest due to the sale.
“The sale of the latest phase of student accommodation at the Bay Campus is an important milestone and we are proud of all that we have achieved,” said Mark Allan, chief executive at St Modwen.
“The proceeds from the sale will be used to reduce group borrowings as well as fund new, higher-growth projects, both within the campus and further afield, in line with our strategy.
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“We continue to work in close partnership with Swansea University on future developments on the site.”
Comprising 2,005 rooms, the student accommodation is part of a £450m development by St Modwen, with the most recent units opening to new students in September 2017.
“We are extremely grateful and thank St Modwen for their excellent provision of the student accommodation at the Bay Campus since its opening in 2015,” said Iwan Davies, senior pro-vice-chancellor at Swansea University.
“Swansea University is committed to providing first-class learning, living and social facilities so that we can offer a truly transformational campus student experience combined with a global outlook and we welcome our new partnership with UPP.”
Sean O’Shea, group CEO at UPP, added: “Our new partnership with Swansea University will help facilitate its ambitious plans and support its long-term vision to enhance its position as a world-class educational establishment for the benefit of students, staff and the local community for generations to come.
“We are delighted to have successfully reached financial close on the deal with St Modwen and we are excited to be providing homes for the tech entrepreneurs, engineers and scientists of the future.”