Tadhamon Capital B.S.C.(c), the Bahrain
-based Islamic investment company today announced the successful completion of an acquisition of 50% ownership alongside Watkin Jones, of a prime purpose built student accommodation block. The block, Athena Hall is located in Ipswich, about 70 miles north east of London. The transaction, with a value of GBP 26.7million, was co-arranged by Tadhamon Capital and Apache Capital Partners, a Bahrain and London based UK real estate investment manager. The transaction was concluded at a net initial yield (NIY) of 7.3% and will distribute a quarterly net cash yield of 8% p.a. to investors.
Athena Hall was developed by Watkin Jones, a UK based real estate developer, in 2010 and is part of a new university campus benefiting from a 5-year rental guarantee across the whole property provided by Watkin Jones and a 30 year nomination agreement with University Campus Suffolk. The property is the only purpose built student accommodation property on campus and current demand significantly outweighs supply. Rent currently charged to students is estimated to be 20% below open market rental values, allowing for strong rental growth potential on review (every 5 years), alongside annual reviews of RPI+0.5%. The property comprises 590 rooms, 6 retail units and a dedicated car park, and will be operated and managed by Fresh Student Living, a specialist student accommodation company and a subsidiary of Watkin Jones. Athena Hall is located in an attractive marina setting, which has been subject to extensive regeneration and has become a new mixed use quarter, close to Ipswich town centre. The property is adjacent to the building which houses the Student Union and Science Laboratories and is in close proximity to other University facilities.
Mr. Waleed Abdulla Rashdan Chief Executive Officer of Tadhamon Capital stated: "This deal follows our acquisition of a special needs school in Hampshire in Q4 2010 and forms part of our Social Infrastructure strategy. The whole team has worked very hard to conclude the transaction, especially in light of the current global financial crisis. Tadhamon Capital and Apache Capital have selected Social Infrastructure as our core strategy as we believe the sector will continue to be resilient in uncertain times, with growing institutional interest, and allows us to provide secure income generating investment opportunities to our investors, with targeted distributions of 7% - 8 % p.a. Social infrastructure is one of few asset classes that provide meaningful income distribution, and is highly attractive when compared to equities, gilts and cash yields, especially when interest rates in the UK, currently at 0.5% are likely to remain low for the foreseeable future. We are currently looking into our 2nd student accommodation property which is located in a prime central London location with a capacity of more than 250 students, and hope to complete this transaction in Q1 2012. Under the same platform, we currently also have a number of transactions in the pipeline which are relatively advanced and we hope to complete our next transaction soon thereafter".
Social Infrastructure as defined by Tadhamon Capital and Apache Capital Partners includes the sectors of Student Housing, Healthcare, Education and Social Housing within the United Kingdom. Each of these sectors benefits from strong macroeconomic drivers which support the underlying property values and through asset management initiatives, offer scope for further value enhancement. These sectors provide investors with the opportunity to invest in assets which are typically supported by strong covenants and benefit from long term income streams, with fixed rental uplifts.
Tadhamon Capital B.S.C. (c) is a Sharia'a-compliant investment company licensed by the Central Bank of Bahrain. Tadhamon Capital specializes in structuring and managing new investments and products across its business lines, consisting of Real Estate, Private Equity, and Treasury & Capital Markets.
Apache Capital Partners LLP, headquartered in London and with an office in Bahrain, is a niche real estate investment management firm. Apache Capital was established in 2008 to take advantage of a steep correction in the value of UK real estate and the partners are seasoned property investment professionals and have completed over £10bn of property transactions.
The Watkin Jones Group, is one of the most experienced and extensive developers of student accommodation schemes in the UK. Since 1999, they have created well over 10,000 student units in prime locations at key university sites across the UK. -Ends-
© Press Release 2012¬