Acquisitive student flat provider Empiric has made a further push into the Scottish market after striking a £26 million deal to buy a 241-bed property in St Andrews.
The stock market-listed firm, which has been building its presence in other locations including Aberdeen, Edinburgh and Glasgow, said that the latest expansion marked its first deal in the Fife seaside town – home to Scotland’s oldest university.
Ayton House was newly completed for the current academic year and comprises a mixture of studios and four and five-bed en-suite apartments, said to have been designed to “a very high specification”. The property is located in a prominent position in the centre of town.
Empiric said it had been acquired with a first-year rental guarantee from the vendor, Threesixty Developments – formerly Knightsbridge Student Housing.
Paul Hadaway, chief executive of Empiric Student Property, said: “Ayton House is a fantastic addition to the Empiric portfolio and marks the company’s first acquisition in St Andrews, a university town which is held in extremely high regard by both domestic and international students.
“Ayton House is one of only two purpose-built student accommodation schemes in St Andrews, which continues to suffer from a significant supply and demand imbalance. This acquisition is in line with Empiric’s investment criteria and returns profile.”
The University of St Andrews frequently tops the rankings of Scotland’s best universities and is popular with international students which make up more than 40 per cent of a student population numbering some 8,500.
In March, Empiric raised £85m through a share placing and subscription offer, beating its £75m target. The firm said it would be using the proceeds from the issue to invest in more purpose-built student housing, “further diversifying the company’s property portfolio”.
Just last month, the firm signed a deal to buy a development in Glasgow for a total of £9.6m. The 155 George Street scheme, which sits opposite Strathclyde University’s main John Anderson campus, will see a vacant office building converted into 87 self-contained studios, along with a two-bed apartment.
KR Developments will carry out the development on behalf of Empiric and is expected to be on-site in the spring, with delivery of the scheme scheduled for summer 2017, in time for the 2017-18 academic year.
A report from property consultancy Savills earlier this year noted that the UK student housing sector had evolved into a “mature and globally recognised investment”. Pointing to record levels of investment in the first five months of 2015, experts said student numbers had been hit by the introduction of higher fees but were now recovering.