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CPPIB-owned firm seals £460m student homes buy

The 6,500-bed portfolio acquired by Liberty Living from Blackstone has made the company the UK’s second-largest owner of student accommodation.

UK student accommodation provider Liberty Living has completed a £460 million ($575.1 million; €539.8 million) acquisition of a 6,500-bed portfolio from Blackstone.

The 13 Union State assets are located in some of the UK’s largest student cities such as Nottingham, Birmingham and Manchester, while the deal also includes a potential site in London.

The transaction lifts Liberty Living’s portfolio to 25,000 beds, the second largest in the UK after Unite. Liberty Living was the subject of a £1.1 billion acquisition by the Canada Pension Plan Investment Board in March 2015 and the Canadian investor has since helped fund deals with a total value of over £800 million, with executive chairman David Shearer pointing to further acquisitions.

“We have ambitious growth plans to meet the changing demands of the student community,” he said. “We are focused on expanding our branded, service-driven business through acquisitions and developments in key markets.”

The deal comes amid large swathes of investment in the sector in the UK. A report from Savills published towards the end of 2016 identified $9 billion of cross-border institutional and private capital entering the UK market over the last three years. Further consolidation is expected to be a “defining feature” over the coming years while potential impacts of Brexit are expected to be offset the strong demand from non-EU students.

Singaporean wealth fund GIC has been particularly active in recent months, agreeing a £227 million deal in February for 3,000 beds in Birmingham and sealing 2016’s largest deal with the acquisition of 7,150 beds alongside developer GSA in October.

Three deals in the sector in 2017 totalling about £450 million have also come wrapped by monoline insurer Assured Guaranty, including the guarantee of £186 million of bonds for a new 2,117-bed facility announced on Monday.