International legal practice Osborne Clarke has advised corporate finance and investment firm, TradeRisks, on arranging and implementing £75.2m of fixed and indexed rate notes to assist Arlington Investors with their purchase of boutique student accommodation provider, Study Inn Group.
The 38-year fully amortising bonds will support the acquisition of Study Inn’s Coventry and Nottingham assets and follows on from Arlington’s debut £210m issuance in February 2014, £50.2m issuance in September 2015, £94m issuance in March 2016 and £68.8m issuance in August 2016, all also arranged by TradeRisks.
The financing comprises an index-linked (73%) and a fixed rate (27%) element and was provided by investors who require assets for liability matching.
The transaction sees Arlington acquire a portfolio comprising of 1,013 beds in Coventry and Nottingham from Study Inn, taking Arlington’s student accommodation holdings to more than 10,000 beds and a total investment value of over £750 million.
The assets are predominantly direct let with some short term university nominations in place up to 2020. There are two further Study Inn assets in Cambridge and Sheffield which have been financed independently by Arlington. All the assets will continue to be managed by Study Inn.
Study Inn Group provides an all-inclusive living package to students. They offer a variety of en-suite studios and shared apartments, for private and group sharing which are fully furnished and fully serviced.
TradeRisks provides independent advice, financing and risk management solutions to UK and international groups within housing, social infrastructure and public sectors.
Omar Al-Nuaimi, Osborne Clarke Finance Partner commented, “Increasing student numbers, coupled with the demand for more deluxe living spaces, means the student accommodation sector has performed well and it continues to represent an exciting opportunity for investors. It has been fantastic to work with TradeRisks and Arlington on implementing this key strategic acquisition and the debt financing for it”.
John Coleman, Director at TradeRisks said, “We are delighted to support Arlington in this acquisition and its continued growth in the student accommodation sector. This transaction highlights the strong appetite from institutional investors for high quality student accommodation assets without a direct university link.”
Sean McKeown, Arlington Advisors’ Managing Director said, “We are delighted to acquire the Study Inn portfolio and to continue to work with them to deliver their operating platform. This was an ideal transaction to take us over 10,000 beds with it being funded by long term institutional debt that continues to support Arlington in its growth”.
The Osborne Clarke team who advised on the transaction was led by Finance Partner Omar Al-Nuaimi, Corporate Partner Mark Wesker and Tax Partner Tracey Wright.
With over 250 years of property expertise, Osborne Clarke’s Real Estate and Infrastructure sector team is a recognised industry leader in the student accommodation sector. The team works with pan-European clients and currently acts for five of the top student accommodation providers in the UK, specialising in structured acquisition as well as corporate and project finance.
