UPP agrees £155m student accommodation deal

Student developer UPP has agreed a £155m deal with the University of Hull to operate 1,750 new rooms on the campus.

The investment will include £127.6m of index-linked bond financing with a tenor of 40 years from Allianz Global Investors and £27.4m of subordinated debt and equity by UPP Group, its shareholders and the university.

Contractor Vinci has been selected as UPP’s construction partner on the development, which has a construction value of £97m.

“We are delighted to have supported the University of Hull’s plans to develop the multi-million-pound West Campus residences project,” said Sean O’Shea, group chief executive officer of UPP.

“Our partnership will enable more students to live on campus at the heart of this fantastic institution.

“By investing further in exceptional infrastructure that enhances the distinctive features of the university’s campus and promotes sustainable living, the university will build on its market-leading position of delivering the very best student experience.”

The development will feature a range of 1,462 new single rooms and one-bedroom apartments across nine blocks, as well as a café, urban green and convenience store.

Construction began last month with 478 due for completion in time for the 2018 student intake and the remaining 984 available in September 2019.

UPP will also take over the operation of 288 existing rooms at the university.

The deal boosts UPP’s university partners to 15 and its portfolio under management or in construction to more than 32,000 student bedrooms.

“That this transaction is our third investment on behalf of our clients into UK higher education in three years, reflects just how much the UK infrastructure debt market has matured,” added Adrian Jones, director of infrastructure debt at Allianz Global Investors.

“We continue to see strong demand from our clients to invest in infrastructure assets that as well as offering them the long-term, stable cash flows they need also support regional economic competitiveness, providing an attractive investment opportunity as well as supporting our quality of life.”

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