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January 20th 2016 – JLL has advised on a forward funding deal for the development of Agard Court, Derby which has provision for 244 en-suite bedrooms. Pricing achieved was in excess of the quoted £15.285m sales price and was sold to a UK institution. This is the third income strip deal that JLL has advised on in Derby. The city has a material under-supply of university provided accommodation with in excess of 72% of students unable to access university accommodation. The prime student accommodation funding opportunity is adjacent to University of Derby’s brand new One Friar Gate teaching campus. Construction is due to commence in January 2017 with completion targeted for May 2018. Martin Le Grice, Head of Alternative Investment at JLL, commented: “The pricing achieved reflects the market’s appetite for long dated indexed income. There is a very strong market demand from institutional investors for this type of annuity-style and indexed-income investment. Income strip transactions give Universities the opportunity to utilise the strength of their covenant to secure new purpose built accommodation.” JLL are currently advising a number of other Universities and Developers on similar structures and expect the strong pricing in the strip market to continue in 2017 and beyond. They also recently undertook the first research study into student housing partnerships between Universities and private sector operators in the UK. This can be seen here. JLL advised the Developer Jensco.
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