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UK Student Accommodation Attracting US Investors

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United Kingdom  New York  KPMG  Sheffield  Nottingham  Student Property  Avenue Capital  Opal Property Group  Avenue Europe Strategy  Avenue Capital Group  Richard Furst  Rob Croxen 

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By - Thursday 17 October 2013

UK Student Accommodation Attracting US Investors

The UK student accommodation market is proving to be one of the most stable and lucrative in the world, filled with sound property investment opportunities and high demand. It is therefore no surprise that US buyers are increasingly being attracted to the segment - a fact made clear by the recent acquisition of a Opal Property Group portfolio.

New York-based Avenue Capital has acquired the package of purpose built student accommodation, equating to approximately 1,800 bed spaces, from the distressed housing provider. The exact terms of the transaction are not known, but the deal is taking place through KPMG, which is the administrator to certain companies belonging to the former Opal Property Group.

Student accommodation assets are located in some of the UK's major university cities, including 992 beds in Sheffield and 648 in Nottingham. Avenue Capital claims this is its first step of a long-term plan to invest in the UK student accommodation sector. Richard Furst, senior portfolio manager at the Avenue Europe Strategy and chief information officer of Avenue Capital Group, said: "We are delighted to complete the acquisition of this portfolio of high-quality student accommodation assets. These properties will serve as the foundation of a broader investment that we intend to make in the UK student accommodation market over the long-term."

Rob Croxen, joint administrator and partner at KPMG, said: "Following a period of stabilised trading, we are delighted to announce the sale of these properties to Avenue Capital.  The sale ensures the continuity of high levels of service provided to students."

For US investors like Avenue Capital, soaring rents are certainly making the UK an attractive place to be. Figures from easyroommate.co.uk showed rent for major British university towns has increased by 8.5 per cent on average over the last year from GBP 329 per month to GBP 357. This rate of growth if 3.5 percentage points higher than the five per cent rise noted between 2011 and 2012.

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