The asset manager has invested an undisclosed amount on behalf of the Lime Property Fund to buy the Green Park House asset in Bath
Aviva Investors has bought a purpose-built student accommodation (PBSA) on behalf of its long income UK property fund.
The asset manager has invested an undisclosed amount on behalf of the Lime Property Fund to buy the Green Park House asset in Bath from Bath Spa University.
Aviva Investors said, as part of the deal, the fund entered into a 27-year lease agreement with the University of Bath.
Green Park House offers 461 units of student accommodation arranged over six floors and four different room types.
The latest deal builds on existing relationship the manager has with the University of Bath, with the Lime Property Fund having acquired a portfolio of student accommodation in 2007 which is also let to the University.
Kris McPhail, fund manager at Aviva Investors, said: Long income has experienced relatively low volatility despite market stresses as a result of the pandemic, offering a gilt-like cashflows with the added benefit of being linked to inflation. With inflationary pressure continuing to rise, the case for the asset class is a compelling one, particularly if coupled with strong counterparty credit.
As a well-established, top-ten UK university, we believe the University of Bath offers exactly this. The tailored and bespoke deal on Green Park House will provide affordable accommodation for students, and at a much lower rate than would be possible through direct letting, McPhail said.
We believe this deal has good social and environmental credentials, but will also deliver strong value and performance for our clients, who value inflation-linked cashflows that can offer a healthy margin over gilts, McPhail said.
Launched in 2004, the Lime Property Fund is a long income real estate fund with £3bn assets under management.