Oasis Capital Bank BSC is seeking to raise more than 150 million pounds ($244 million) by selling its stake in three central London student dormitories, according to two people with knowledge of the plan.
The Bahrain-based bank hired broker Jones Lang LaSalle Inc. (JLL) to sell its 75 percent stake in Prime Central London Student Accommodation, a venture with Unite Plc (UTG) that owns the properties in London’s Islington and Southwark districts, said the people, who declined to be identified because the sale is private.
The sale process won’t start for another several weeks, when the new academic year starts and occupancy levels in dormitories at London’s universities are more clear, the people said.
Pension funds and institutional investors are flocking to student housing because of the regular, long-term rental income they generate, powering a record 800 million pounds of property sales in the first half.
Nobody at Oasis Capital Bank was immediately available to comment.
The bank formed the venture in August 2009 with publicly traded Unite, the U.K.’s largest student housing operator and manager of the residences. The dormitories opened in 2010 and will generate an estimated net operating income of about 12.7 million pounds in the 2012-2013 school year, according to a marketing brochure.
Most of the students renting rooms in the dormitories that can accommodate a total of 1,129 people are from outside the U.K. Two residences have supermarkets located at street level.
PGGM NV, manager of the second-largest Dutch pension fund, last week acquired a 60 percent stake in UPP Group Holdings Ltd., the U.K.’s second-largest student-housing operator, in a deal valued at about 840 million pounds.
London is a hotspot for sales of student housing because of its perceived haven status and the high proportion of overseas students who study in the British capital. Four in five full- time students aren’t housed by universities or in private halls of residence, helping keep vacancy rates low and lifting rents, Chicago-based Jones Lang estimates.
To contact the reporter on this story: Simon Packard in London at email@example.com