Blackstone Selling $785M Student Housing Portfolio

Blackstone is in talks to sell its Nido student accommodation portfolio in a deal that could reach 500 million pounds ($786 million), Reuters reported Friday. The firm is in talks with “less than five parties” about a potential sale. Nido comprises three UK assets and one in Barcelona, Spain.

(Reuters) – U.S. private equity company Blackstone is in talks with less than five parties for a potential 500 million pounds ($786 million) sale of its Nido student accommodation portfolio, a source familiar with the matter told Reuters.

The parties were mostly non-European and included sovereign wealth funds, banks and investors with existing student housing assets, the source said, adding they could buy all or part of the Nido portfolio.

A shortlist of preferred bidders would be drawn up in October, the source said, noting most of these potential buyers were not yet active in the UK’s student accommodation sector.

Blackstone declined to comment.

Nido comprises three UK assets and one in Barcelona, Spain.

Blackstone’s potential Nido sale follows a report Barclays Capital is close to selling its majority stake in UK student housing group University Partnerships Programme to Dutch pension fund PGGM for about 1 billion pounds.

The potential Nido sale follows Blackstone putting its 1,000-bed student housing block in London’s King’s Cross up for sale for 180 million pounds in March. The King’s Cross asset was being marketed by Jones Lang LaSalle .

The Nido brand, whose name means “nest” in Spanish, includes the world’s tallest student accommodation block, in Spitalfields, east London, a 277-bed block in Notting Hill, west London, and a 724-bed scheme in Barcelona.

The Spitalfields scheme is worth about 200 million pounds, while the Notting Hill block is worth 45 million pounds, the source said, declining to put a price on the Barcelona asset.

“The whole portfolio, including Barcelona, is (worth) about 500 million pounds,” the source said.

Blackstone first entered the UK’s student housing market in 2005 with the King’s Cross development.
The sector, estimated by CB Richard Ellis to be about 6.6 billion pounds in size, has weathered the global financial meltdown on the back on strong demand from overseas students.

Recent entrants into the market include Knightsbridge Student Housing, backed Oaktree Capital Management, and a joint venture between Carlyle Group and Generation Estates.

($1 = 0.635 British Pounds)

(Editing by Andrew Macdonald)

(Reporting by Brenda Goh)