Purpose-Built Student Housing Portfolio in London Changes Hands

By Balazs Szekely, Associate Editor

London, England—LetterOne Treasury Services recently picked up the entire Pure Student Living portfolio in a transaction worth nearly $811.5 million (£532 million). The seller, The Carlyle Group announced the deal on March 3.

LetterOne is a privately owned Luxembourg-based global investment vehicle focused on value-driven investments in the Energy and Telecoms sectors through its two main business units L1 Energy and LetterOne Telecom. LetterOne Treasury Services manages the liquidity of the group and holds an investment portfolio of circa $14 billion (as of 31 December 2013) across securities, both credit and equity, loan deposits and funds as well as investments in a number of hedge funds and private equity funds.

Carlyle entered the London student housing market in 2010 with the acquisition of a Highbury site on behalf of its third pan-European real estate fund, Carlyle European Real Estate Partners III, and launched the Pure brand in 2012. Since then, the Pure Student Living portfolio has grown to 2,170 rooms that are spread across five assets, one of which is currently under construction. The 417-room Pure Whitechapel located in East London is scheduled for completion in August 2015. The other four properties, Pure Highbury, Pure Hammersmith, Pure Bankside and Pure City are fully operational. The portfolio has been managed by Generation Estates, a specialist developer and operator that will be retained to manage the construction works at Whitechapel.

As construction of Pure Whitechapel is still ongoing, the transaction has been divided into two phases. The acquisition of the four operational properties was only the first step, and the delivery of the fifth asset will mark the final checkpoint of the deal. Carlyle’s advisors for the transaction were BLP and JLL Corporate Finance.

Carlyle remains active in the student housing market through a 1,700-room portfolio in the Netherlands. The global alternative asset manager invested in Student Hotel-branded facilities located in Amsterdam, Rotterdam and The Hague back in 2009.