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Funding
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Forward Sale - Student Accommodation Development in Seville, Spain

London
,
United Kingdom
DEAL
001091
POSTED ON
October 9, 2020
INVESTMENT SUMMARY
IRR
NA
Multiple
NA
LTV
NA
First Year CoC
5.5%
Stabilised CoC
5.5%
Status
Funding
Deal #
001091
Asset Class
Student Accommodation
Strategy
Development
Capital Type
Full Stack
Deal Size
18.5
m
Investment Size
18.5
m
Holding Period
NA
INVESTMENT HIGHLIGHTS
  • Construction works start in January 2021 and delivery is scheduled for June 2022, providing the investor a comfortable buffer to be ready for the residence to go open in September 2022 for the start of a new academic year.
  • The site is positioned in the heart of the Isla de la Cartuja, which is the former EXPO ’92 exposition zone and now a vibrant campus area and tech hub with multiple faculties of the University of Sevilla, research centers and administrative and educational facilities.
  • The residence is neighbouring multiple faculties located within the Isla de la Cartuja, of which the Faculty of Communications (+2.500 students, 5 minutes walk) and the ETSI (+4.500 students, 1 minute walk) are the most important ones.
  • Besides the multiple educational facilities, Isla de Cartuja transformed over the last years into a tech hub with multiple startups, incubators and research facilities in the area. In addition, the area is known for the cities landmark Torre Sevilla, the highest skyscraper of the city and the new shopping mall El Centro Comercial Torre Sevilla.  
  • The project benefits from planning permission (expected September 2020) for the demolishment of the existing building and the development of a new student residence with 232 self contained studio spaces and a ground and basement level bar/restaurant/pool. The rooms are designed efficiently as 15,5 – 17,5 usable sqm self contained studios. The student scheme will benefit from a decent amount of amenities including laundry, gym, multipurpose rooms, multimedia room, restaurant, reception, parking, and a pool.
  • The Sponsor seeks to receive offers for the acquisition of the turnkey residence and is open to receive offers through both a forward purchase as well as a forward funding structure.  Offers are expected at an asking price of €18.5m (€79k per key). The Sponsor has secured a lease agreement that can be brought into the sale for €1m pa (5.5%)
KEY DEAL POINTS

Campus Location

The city of Sevilla has two main campus areas, 1 relatively new in the north “La Cartuja” and the historical “University” area in the south. While Campus South, with apprx. 50.000 students, is a long time established student district, the area gets currently close to saturation due to numerous small to large sized student residences. The Cartuja campus, which grew only as of 1993, through the reconversion of the Expo ’92 exposition site, is a relatively new campus where a big gap remains between offer and demand for student accommodations. Currently, over 8.000 students study on the Isla de la Cartuja spread over multiple faculties and educational institutions. In recent years, the main university in Sevilla, the Universidad de Sevilla, relocated multiple faculties to this area. However, only 1 small sized residence is currently operational in the area.

Market

With a student population over 10.000, still increasing over time, and with multiple research facilities, incubators, businesses and start ups on “La Cartuja”, the area is reinventing itself as the new tech hub of Sevilla. Currently, 1 small sized residence is operational but LIFE.ES foresees to be the second and biggest one by Q1 2022.

Financials

A stabilized GOI in Y3 is estimated at €1.566.411.  
The project can be delivered with our without an operating contract through a rental agreement. The rental contract, with an international operator, will offer throughout the 10 year duration of the contract an average annual rent of €1.000.000. All operational expenses are covered by the operator in this contract. A valuation report by CBRE estimates the gross market value of the residence, at completion of the works, at € 20.700.000.

KEY FINANCIALS
ABOUT SPONSOR
Seasoned Sponsor
A reputable multi-cycle industry operator. Has less than 15 years of verifiable track record and less than $500m in turnover annually or less than $10bn of AUM.
FURTHER IMAGES
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LOCATION
DEAL DATA ROOM
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CONTENT RESTRICTED

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INVESTMENT SUMMARY
Strategy
Development
Asset Class
Student Accommodation
LTV
NA
Deal Size
18.5
m
Closing
Capital Type
Full Stack
Investment Size
18.5
m
Net IRR
NA
Multiple
NA
Holding Period
NA
INVESTMENT DETAILS
  • Construction works start in January 2021 and delivery is scheduled for June 2022, providing the investor a comfortable buffer to be ready for the residence to go open in September 2022 for the start of a new academic year.
  • The site is positioned in the heart of the Isla de la Cartuja, which is the former EXPO ’92 exposition zone and now a vibrant campus area and tech hub with multiple faculties of the University of Sevilla, research centers and administrative and educational facilities.
  • The residence is neighbouring multiple faculties located within the Isla de la Cartuja, of which the Faculty of Communications (+2.500 students, 5 minutes walk) and the ETSI (+4.500 students, 1 minute walk) are the most important ones.
  • Besides the multiple educational facilities, Isla de Cartuja transformed over the last years into a tech hub with multiple startups, incubators and research facilities in the area. In addition, the area is known for the cities landmark Torre Sevilla, the highest skyscraper of the city and the new shopping mall El Centro Comercial Torre Sevilla.  
  • The project benefits from planning permission (expected September 2020) for the demolishment of the existing building and the development of a new student residence with 232 self contained studio spaces and a ground and basement level bar/restaurant/pool. The rooms are designed efficiently as 15,5 – 17,5 usable sqm self contained studios. The student scheme will benefit from a decent amount of amenities including laundry, gym, multipurpose rooms, multimedia room, restaurant, reception, parking, and a pool.
  • The Sponsor seeks to receive offers for the acquisition of the turnkey residence and is open to receive offers through both a forward purchase as well as a forward funding structure.  Offers are expected at an asking price of €18.5m (€79k per key). The Sponsor has secured a lease agreement that can be brought into the sale for €1m pa (5.5%)
INVESTMENT HIGHLIGHTS

Campus Location

The city of Sevilla has two main campus areas, 1 relatively new in the north “La Cartuja” and the historical “University” area in the south. While Campus South, with apprx. 50.000 students, is a long time established student district, the area gets currently close to saturation due to numerous small to large sized student residences. The Cartuja campus, which grew only as of 1993, through the reconversion of the Expo ’92 exposition site, is a relatively new campus where a big gap remains between offer and demand for student accommodations. Currently, over 8.000 students study on the Isla de la Cartuja spread over multiple faculties and educational institutions. In recent years, the main university in Sevilla, the Universidad de Sevilla, relocated multiple faculties to this area. However, only 1 small sized residence is currently operational in the area.

Market

With a student population over 10.000, still increasing over time, and with multiple research facilities, incubators, businesses and start ups on “La Cartuja”, the area is reinventing itself as the new tech hub of Sevilla. Currently, 1 small sized residence is operational but LIFE.ES foresees to be the second and biggest one by Q1 2022.

Financials

A stabilized GOI in Y3 is estimated at €1.566.411.  
The project can be delivered with our without an operating contract through a rental agreement. The rental contract, with an international operator, will offer throughout the 10 year duration of the contract an average annual rent of €1.000.000. All operational expenses are covered by the operator in this contract. A valuation report by CBRE estimates the gross market value of the residence, at completion of the works, at € 20.700.000.

Funding
SUMMARY
Opportunity to acquire on a forward funding basis a 232 beds student accommodation residence in Seville, Spain. The Sponsor is an experienced operator and developer with currently over 3,000 beds under management and a further pipeline of 2,000 beds in Spain. . After securing a 10 year lease agreement the sponsor is looking to complete a forward sale to be delivered in June 2022.
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