One of Europe’s largest real estate investors agreed to buy a prime central London student block for nearly £70m today, in a move that reflects the growing level of property investment being poured into the capital’s student accommodation sector.
Aberdeen Standard Investments, which manages more than £43bn of real estate assets, has splashed out £68.8m for Grosvenor House on Covent Garden’s Drury Lane.
The purchase is fresh evidence of the booming demand for London’s prime student accommodation assets, which have benefitted from an influx of ultra-wealthy young internationals.
More than 46,000 square feet is currently let in the building to the London School of Economics and Political Science (LSE) until September 2027.
Grosvenor House’s higher-than-average rents, which include one bedroom flat with a private bathroom ion the market for £567 per week, are driven by the site’s close proximity to Oxford Street shops and Leicester Square.
David Stewart, fund manager for Aberdeen Standard Investments, said: "London's role as a global centre for education makes student accommodation an attractive investment that can deliver strong returns over the medium to long term, due to the quality of the universities in the capital and the demand for accommodation."
Stewart added: "The purchase of Grosvenor House is aligned with the fund’s strategy of increasing its exposure to alternatives through the acquisition of high quality assets in prime locations with the potential for active asset management."