Student accommodation
Contents Introduction...5 The evolution of a new asset class...6 Issues you may be facing...8 How we can help you...10 Experience...12 About the team...16 About Taylor Wessing...18 3
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Introduction Whether an investor, a developer, a funder or an operator, our dedicated team of specialists can provide commercial insight and advice on all aspects of the purpose built student accommodation sector from site acquisition, planning, development and construction to transactional real estate, real estate disputes, corporate structuring and tax. Our track record of experience helps to anticipate and mitigate risk, and address the unique challenges faced by those operating in the sector. 5
The evolution of a new asset class The UK purpose built student accommodation sector showed resilience throughout the recessionary period and since 2008 the level of transactions and increasing global interest has arguably propelled the asset class from an alternative to a mainstream real estate investment. We are now seeing record levels of investment in the sector from across the globe, with 2015 levels reportedly exceeding the volume of investment in the US student housing market for the first time. 6
However, the influx of interest from insurance companies, pension funds, REITs and foreign investors in a sector that has a structural undersupply and planning constraints on new development in core student areas has seen increased competition for good quality stock in the right location. Market knowledge is therefore key to successful participation in the sector. Taylor Wessing has been an active player in the sector throughout its evolution acting for a range of developers, investors and funders. We have wideranging experience and an in depth knowledge of the market and its sophistications for all stakeholders. 7
Issues you may be facing Purpose built student accommodation deals can be unique. For both new entrants and experienced developers and investors with an extensive track record of operating in the real estate industry, the student accommodation sector can present unfamiliar nuances. In addition to many other considerations which typically arise on student accommodation deals, some specific issues you may be facing could include: uu uu uu site constraints and development issues formulating the planning need case for purpose built student accommodation, use beyond core term times and the provision of affordable student accommodation assessing liability for Community Infrastructure Levy (CIL) and evaluating the reliefs that may be available 8
uu uu uu uu uu uu understanding the conditionality of contracts, including defining the conditionality of site acquisition understanding and addressing the tax implications of development, investment and operational structures addressing the onerous conditions that could be imposed by the local planning authority and their impact on financial viability timing of delivery of new stock and dealing with the ramifications of unforeseen delays in construction remedy of defects and the implications of the National Codes issues surrounding letting strategies and Facilities Management delivery 9
How we can help you At Taylor Wessing, our student accommodation team works with funders, investors and other stakeholders in the development industry to analyse the market for student accommodation and to address planning and other development constraints. We identify and solve transactional issues and ensure construction procurement meets commercial objectives and delivers the required legal protection. Our approach ensures efficient and successful delivery of purpose built student accommodation developments. By keeping close to our clients, we believe that we positively assist our clients in identifying better ways for them to achieve their ambitions. 10
We provide advice to different stakeholders involved in the student accommodation sector, including: Asset Managers Intermediaries Operators Finance Providers Construction Contractors Investors Developers Our team of specialists in real estate, planning, construction, tax, corporate structuring and finance develops creative solutions to the unique nuances faced by investors and developers in student accommodation. As a result we re proud to have established a position as expert advisors in this sector. 11
Experience > Advised McLaren on the sale by way of forward funding of a portfolio valued at approximately 150m of six student housing developments to a new investment vehicle owned by a group of German pension funds and managed by Hines, a US-based privately owned global real estate investment firm. > Advised UK student REIT Empiric on its acquisitions of student accommodation properties in London, Leicester, Lancaster, Bath, Falmouth, Portsmouth, Durham, Newcastle and Leeds - a mix of stand alone investments and forward funding deals. > Advised Lloyds Bank in relation to their 37m+ facility to University Capital Trust (a Guernsey property unit trust) secured on 5 UK student accommodation properties. 12
> Advised McLaren in connection with its development of a 358 bed student accommodation scheme at The Movement, Greenwich, including advising on conditional site acquisition, pre-letting to the University of Greenwich on a 35 year lease, forward funding by Legal & General, construction and procurement of FM services. > Advised University of Surrey on the development of Manor Park with a total of 1800 units. > Advised Santander and PwC in relation to the administration of Opal, a significant national student accommodation provider. > Advised on a 100m joint venture between McLaren and Apache Capital Partners for the development of the 456-bed student accommodation and 43,000 sq ft office scheme in Shoreditch, London, completed in 2015. 13
> Advised Nationwide in relation to their 29.5m loan facility to a Luxembourg borrower secured against student accommodation in Lincoln. > Advised McLaren on its pipeline of student accommodation developments in Oxford, Cambridge, Cardiff and Kingston upon Thames. > Advised AIB on 300m standby facilities made available to the UNITE Group (the UK s largest provider of student accommodation) to finance the provision of student accommodation. > Advised McLaren on the development and forward sale to LetterOne of student accommodation properties in Bath, Brighton, Edinburgh and York, totalling 839 beds and the sale to LetterOne of the 13-storey, 253-bed Paris Gardens, London development. 14
> Advised JMS Estates (IOM) (an investor/ developer) who has acquired two properties for in excess of 300m for the purposes of student housing. > Advised Metlife on a 122.85m loan facility. The facility was made available to three JPUT borrowers sponsored by Greystar (a US institutional investor) and the Canadian Public Sector Pension Board and secured on the three student accommodation assets in London. > Advised on a mezzanine financing for Cheyne Capital who are investing in development of student accommodation in Cardiff. > Advised Fusion Global Investments in respect of senior loan facilities with each of LaSalle Investment Management and Mass Mutual and the Royal Bank of Scotland to finance their student accommodation development projects in Nottingham and Bristol respectively. 15
About the team Taylor Wessing s student accommodation team has some of the most wide-ranging experience in the sector. As a market leader, our collaborative team of specialists advise on real estate development and investment, tax and corporate-led work in addition to planning and environmental law, construction and finance. Our clients can call upon lawyers from an integrated global network across the UK, Germany, France, The Netherlands, the CEE, Dubai, China, Singapore and Indonesia. With growing interest from overseas investors, our ability to respond to client demand from around the world creates huge benefit in bringing together mutually beneficial opportunities for our clients and contacts operating in this field. Our team believes in offering an integrated client service. Designated partner-led teams are created for each client and emphasis is placed on the delivery of commercial, practical and pro-active advice at all levels. We believe in identifying core issues at an early stage and proposing creative solutions. 16
Key Contacts Paul Leamy (Real Estate) Partner, London +44 (0)20 7300 4656 p.leamy@taylorwessing.com Alistair Watson (Planning & Environment) Partner, London +44 (0)20 7300 4240 a.watson@taylorwessing.com Heather Buttle (Banking & Finance) Partner, London +44 (0)20 7300 4141 h.buttle@taylorwessing.com Jill Hamilton (Construction) Senior Associate, London +44 (0)20 7300 4868 j.hamilton@taylorwessing.com Robert Young (Tax) Partner, London +44 (0)20 7300 4201 r.young@taylorwessing.com Chris Komodromou (Real Estate) Senior Associate, London +44 (0)20 7300 4269 c.komodromou@taylorwessing.com Hanna Ross (Real Estate) Senior Associate, London +44 (0)20 7300 7154 h.ross@taylorwessing.com Emma Tait (Planning & Environment) Associate, London +44 (0)20 7300 4952 e.tait@taylorwessing.com 17
About Taylor Wessing Taylor Wessing is a leading international law firm with a single-minded approach: to help its clients succeed by thinking innovatively about their business issues. Taylor Wessing has around 1,200 lawyers working across 33 offices in Europe, the Middle East, the US and Asia, offering an integrated service across the full range of practice areas, with core strengths in real estate, finance, corporate, IP and private wealth. The firm also has particular expertise in advising clients in North America, Brazil and India. At Taylor Wessing we are proud of our reputation as a forward-thinking firm. We have a clear focus on supporting the fast growing industries of tomorrow and are active in real estate and infrastructure; technology, communications and brands; life sciences and healthcare; financial institutions and services; and energy and environment. For more information please contact a member of our team set out within this flyer. 18
Europe > Middle East > Asia taylorwessing.com Taylor Wessing LLP 2017 This publication is intended for general public guidance and to highlight issues. It is not intended to apply to specific circumstances or to constitute legal advice. Taylor Wessing s international offices offer clients integrated international solutions. Though our offices are established as distinct legal entities and registered as separate law practices, we are able to help our clients succeed by providing clear and precise solutions with high-level legal and commercial insights. For further information about our offices and the regulatory regimes that apply to them, please refer to taylorwessing.com/regulatory.html and rhtlawtaylorwessing.com. TW_001676_04.17