In a statement, Goldman Sachs’ merchant banking unit and Wellcome Trust, a medical charity, stated they have agreed to sell iQ, a British student accommodation company to Blackstone for $6.06 billion (4.66 billion pounds).
Outside of North America, Britain is the second biggest market for purpose-built student accommodation and over the last decade the market has expanded rapidly with the sector valued at more than 50 billion pounds.
According to Statista, a market and consumer data firm, there were 142 universities in the UK in 2017 and between 2017 and 2018 there were 2.34 million students studying at higher education institutions in the country, according to the Higher Education Statistics Agency.
“British higher education is globally renowned and we are delighted to invest meaningful capital to support iQ’s further growth and continue to deliver the highest quality accommodation for students across the country,” said James Seppala, Head of Real Estate Europe at Blackstone.
According to Wellcome and Goldman, since the deal is the largest ever private real estate deal in Britain, its likely it would be subject to regulatory approvals.
Wellcome was one of iQ’s founding investors since its creation in 2006; it merged with Goldman Sachs’ student housing business in 2016. It owns and manages more than 28,000 beds across Britain, with a development pipeline in excess of 4,000 beds.
With traditional home building and home sellers faltering, property firms are increasingly turning to Britain’s budding build-to-rent sector.
In 2019, student housing provider Unite stated it would acquire Liberty Living Group for 1.4 billion pounds.
iQ’s portfolio is concentrated in London – where it is the largest owner of student accommodation – and also Manchester, Leeds, Sheffield, Edinburgh and Birmingham.
Goldman Sachs, Morgan Stanley & Co. International and Eastdil Secured were as financial advisors to the sellers.
Bank of America and Citi were financial advisors to Blackstone.