Liverpool developer Downing secures £439m investment in UK-wide student halls portfolio

Liverpool-headquartered developer Downing has secured a nine-figure investment as part of a massive UK student housing joint venture.

European Property Investors Special Opportunities IV (EPISO 4) acquired a 90% interest worth £439m in the joint venture, whose portfolio comprises six halls of residence in Leeds, Newcastle, Exeter, Coventry, Warwick and Edinburgh.

The joint venture plans to forward purchase two additional residences next year, including a 32-storey, 578-bed scheme in London and another in Glasgow.

Following the deal, Downing will retain a 10% stake in the joint venture.

The company developed all six of the existing halls in the last two years and will also deliver the two new developments.

Real estate investment management boutique Tristan Capital advised the fund.

Downing’s finance director, Simon Garnett, said: “We are delighted to have completed this agreement with Tristan and look forward to working with them on this portfolio.

“This partnership further establishes Downing as a major player in the student accommodation sector. Our market-leading portfolio and existing immediate pipeline of developments gives us a strong presence across the UK’s leading universities cities.”

He added: “We are proud of our Downing Students brand which has become a hallmark for high-quality, well-managed, innovative developments which offer outstanding pastoral care. Our experienced team will remain involved in the successful management and operation of over 5,000 beds.”

Speaking further, Simon said the agreement gives Downing “the capital needed to continue to invest in and grow our student accommodation portfolio”.

He continued: “We have a vibrant development pipeline – with key schemes due for completion across the UK’s most prestigious university cities. We look forward to continuing to bring best-in-class student developments to the market and remain highly optimistic about the significant potential in this asset class.”

Peter Mather, managing director of Tristan Capital, commented: “This joint venture allows us to access a best-in-class, newly purpose-built student accommodation portfolio, in leading university cities.

“Having an experienced operating partner is critical for investing successfully in this niche sector and Downing offers a wealth of experience, unrivalled industry relationships and a proven track record as a first class developer and operator.”

AIG provided senior financing for the portfolio. EPISO 4 was advised on the acquisition by BLP, EY and Knight Frank. JLL, Hill Dickinson, and DLA acted for Downing.