St. Modwen sells Swansea student accommodation for €99.5m

St. Modwen has completed the sale of its 45-year leasehold interest in its purpose-built student accommodation at Swansea University Bay Campus for a total cash consideration of €99.5m (£87.3m) to University Partnerships Programme (UPP Group Limited, "UPP"). The assets that have been sold comprise St. Modwen's interests in the completed student accommodation buildings, including ancillary commercial leases. The sale is by way of a disposal of the entire issued share capital of St. Modwen Properties VIII S.à.r.l. and St. Modwen (SAC 2) Limited and certain freehold interest. The planned disposal follows a competitive sales process and was broadly in line with book value. The gross consideration for the 45-year leasehold asset is €158.9m (£139.3m), representing a yield of 5.7%, with a cash consideration of €99.5m (£87.3m) reflecting the transfer of the associated finance lease creditor. The disposal will result in the reduction of €6.6m (£5.8m) of net rental income compared to 2017, offset by the reduction of €2.4m (£2.1m) in finance lease interest due to the sale. Totalling 2,005 rooms, the student accommodation was built as part of a €513.2m (£450m) development by St. Modwen, with the most recent units opening to new students in September 2017. The rolling programme of investment by St. Modwen into the 65-acre Bay Campus site has seen the Company deliver in total over 1m ft² of student accommodation and state-of-the-art academic and research facilities.