Barclays Said to Sell UPP Student Homes Stake to GingkoNeil Callanan
Barclays Plc funds sold their 40 percent stake in UPP Group Holdings Ltd., the U.K.’s second-largest student-housing operator, to China’s Gingko Tree Investment Ltd., a person with knowledge of the deal said.
Gingko Tree bought the remaining stake held by funds owned by Barclays Infrastructure Funds Management, said the person, who asked not to be identified and didn’t provide terms because the transaction is confidential.
The funds sold 60 percent of UPP to Dutch pension-fund manager PGGM NV in September in a deal that valued the company at about 1.4 billion pounds ($2.2 billion), including debt. UPP plans to invest an additional 1 billion pounds into developing universities halls of residence, according to its website.
Jon Laycock, a spokesman for London-based Barclays, Jon Wakeford, a spokesman for UPP, and Mike Bryan, a Gingko Tree investment manager in London, all declined to comment. Exclusive talks between the bank and the investment firm had been taking place since September, two people with knowledge of the discussions said at the time.
U.K. student property deals surged last year as a rise in foreign students helped fuel demand for dormitory rooms, boosting yields. Companies including Mansion Student Accommodation Fund and operators backed by buyout firms Oaktree Capital Management LP and Carlyle Group LP invested 800 million pounds on student homes in the first half, Jones Lang LaSalle Inc. estimated.
UPP managed dormitories for 13 universities in the U.K. through September, housing 26,406 students and generating annual rental income of 104 million pounds. It had earnings of 46 million pounds before interest, taxes, depreciation and amortization in fiscal 2012.
The U.K. student accommodation fund run by Unite Group Plc, the country’s largest operator of student housing operator, rose 8.7 percent in 2012, the company said in a Jan. 9 statement.
Fee increases for students enrolling at U.K. universities and stricter visa regulations will results in fewer student accommodation deals this year, broker Jones Lang LaSalle Inc. predicted last month.