SINGAPORE - Singapore Press Holdings (SPH) has expanded its purpose-built student accommodation portfolio with the acquisition of seven assets in the United Kingdom for £411 million (S$740 million).
This will add 2,383 beds to SPH's portfolio, raising it to a total of 7,726 beds across 18 cities in the UK and Germany, the media group said on Monday (Dec 23).
It also grows SPH's footprint across seven new UK cities: Cambridge, Oxford, Bath, Brighton, Durham, Edinburgh and York.
The two assets in Oxford and Brighton are under development and expected to be operational for the academic year 2020/21. SPH will spend about £37 million in estimated construction costs for both assets, to be paid progressively till their completion.
About 84 per cent of the beds are in close proximity to top-ranked universities, including the University of Oxford and the University of Cambridge. The transaction increases SPH's presence in cities where the supply of student housing is limited, SPH noted.
The acquisition was completed simultaneously with the signing of the sales and purchase agreement on Dec 20 by SPH's wholly owned subsidiary Straits Ten and 10 vendors for all shares in Student Castle Investments Holdco, which owns and manages the portfolio.
The £411 million consideration payable by Straits Ten includes a £260.7 million payment to the vendors for their Student Castle shares, a £131.9 million payment to HSBC UK Bank to fully discharge amounts owed by Student Castle under existing loans, as well as a rental guarantee and an income support amount.
It also includes £3.2 million in construction costs, equivalent to 10 per cent of the estimated remaining amounts due to the building contractors of the two assets under development.
SPH shares closed at $2.16 last Friday, down three cents or 1.4 per cent.