UPP closes Welsh deal

University Partnerships Programme (UPP) has reached financial close on a student accommodation deal with a university in Wales.

The developer has successfully sealed the GBP43m acquisition of the freehold of 411 rooms at Swansea University’s Bay Campus.

Under the deal with St Modwen, Swansea University and Swan Global Education LLP,  will take the total number of UPP operated rooms on the site to 2,432. It follows a GBP98m transaction in February 2018, where UPP acquired two companies from St Modwen Properties to operate 2,021 rooms, as well as acquiring a freehold property interest in further accommodation. UPP has been delivering facilities management services to the 411-room scheme for contractor St. Modwen through its subsidiary, UPP Residential Services Limited, since the college opened in February 2019.

The acquisition includes GBP38.7m of index-linked debt from Aberdeen Standard Investments, with a debt tenor of circa 45 years. UPP Group Holdings Limited and its shareholders will invest GBP4.7m of subordinated debt and equity.

Alex Campbell, Investment Director at Aberdeen Standard Investments, commented: “We are pleased to partner with UPP to finance this project and to support Swansea University’s ongoing success. The investment provides index-linked cashflows, which are attractive to the participating insurance and pension funds and can help to match their longterm liabilities.”

Swan Global is a joint venture between the university and Navitas, an international pathway course provider, which has underwritten 100% of the rental and utilities costs on the 411 rooms for the first 10 years. Upon conclusion of the initial 10-year agreement, a further arrangement with Navitas could be negotiated - otherwise the accommodation is set to revert to a traditional offering to higher education students through the university.

Richard Beinfait, CEO of UPP, said: “This latest transaction is testament to the strength of our long- term partnership with Swansea University.”

Andrew Rhodes, the university’s COO, added: “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.”