Opal student assets set for move to Australia’s Campus

Australian operator poised to beat two US rivals to win £245m portfolio

Australian group Campus Living Villages is in advanced talks with administrator PwC to buy a £245m portfolio of former student housing assets of the collapsed Opal Property Group.

Campus is understood to have edged out two rival bidders from the US – Avenue Capital and Greystar Real Estate Partners – in a move that will more than double the size of its UK business and shows the extent of interest from overseas capital in the UK student housing market.

Campus has more than $1.2bn of assets under management, mainly in the US and Australia. The group entered the UK market in 2008 with a target of creating a 20,000-bed portfolio through development and investment.

Until this month, Campus ran property with 3,200 beds over two campuses – University of Salford and the University of Bedfordshire in Luton – but it is poised to gain control of a further 4,539 beds from the administration of Opal.

The portfolio, which produces a £16.87m annual rental income, is spread across Liverpool, Manchester, Leeds, Birmingham, Nottingham and Newport.

The largest single asset is the £78.5m, 824-bed McMillan Student Village in Greenwich, south-east London.

The sale’s completion is imminent, with DTZ advising PwC. Savills is acting for Campus, which, in a separate deal this month, joined forces with M&G Investments to buy 704 en-suite student rooms in Bournemouth for £38.05m.

PwC was originally acting on behalf of four lenders to Opal – Santander, Bank of Ireland, Barclays and National Australia Bank (NAB). But NAB’s debt was traded to US hedge fund manager Davidson Kempner during the summer.

Opal was placed in administration in March after failing to restructure nearly £1bn of debt. Campus’s acquisition follows this month’s purchase by Avenue Capital of 1,800 former Opal beds from administrator KPMG for £100m.

Last month, Greystar and Goldman Sachs acquired 21 former Opal assets, totalling over 7,200 beds, for nearly £330m from administrator Ernst & Young and receiver BNP Paribas, who were advised by Ernst & Young Real Estate Corporate Finance.

KPMG is expected to market a final Opal portfolio later this year.

• The open-ended, £458m Mansion Student Accommodation Fund was suspended last week and closed to redemptions. The company said it had been unable to meet increasing redemption requests without selling assets or refinancing.