Canada Pension Plan Buys U.K. Student Homes for $1.7 Billion

Canada Pension Plan Investment Board has bought a portfolio of student accommodation in the U.K. for 1.1 billion pounds ($1.7 billion).

The deal comprises 16,700 rooms in 40 residences under the Liberty Living brand in 17 of the nation’s largest university towns, CPPIB said in an e-mailed statement. The property was sold by the Brandeaux Student Accommodation Fund.

“This sector is an attractive one for CPPIB and we expect to see continued demand for well-located and well-managed student residences,” Andrea Orlandi, managing director and head of real estate investments Europe at CPPIB, said in the statement.

Investors are buying student accommodation that offers higher yields than stores and office buildings, with Carlyle Group LP paying 532 million pounds for Pure Student Living, a 2,170-room portfolio in central London, on March 3.

Investment in U.K. student homes reached 2.37 billion pounds during 2014, up from 2.2 billion a year earlier, prompted by record student numbers according to CBRE Group Inc. January applications climbed 2 percent to 592,290 from a year earlier, according the the University and College Admissions Service.

Macquarie Capital advised CPPIB.

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