Singapore Press Holdings (SPH) is diversifying its purpose-built student accommodation portfolio beyond the UK, with a 15.6 million euro (S$23.4 million) acquisition in Bremen, Germany.
SPH’s wholly-owned subsidiary Straits Nine has entered into an asset purchase agreement with Liberty Living (Galileo Residenz) for the proposed acquisition, SPH, which publishes The Business Times, said early on Thursday morning.
This is the company’s fifth investment since last year.
While the UK remains a key focus for SPH, Germany has potential because the country has one of the largest student populations in Europe.
Total student numbers in German universities have risen by more than 30 per cent over the last decade to 2.87 million in the winter semester of 2018/2019, SPH noted.
The consideration of 15.6 million euros was arrived at after arms’ length negotiations. It took into account, among other things, the valuation of the asset, its historic performance, rent level, the asset’s operating budget and market capitalisation rates.
The freehold asset, named Galileo Residenz, comprises 284 beds and is located on the University of Bremen campus, which has a student population of over 19,000, accounting for about 60 per cent of the total number of students in Bremen, according to the university’s website. Bremen is next to the city of Hamburg.
The property is within walking distance of Bremen Technology Park, which houses more than 500 companies and is a hub for high-tech and research in northern Germany.
Galileo Residenz has had near-full occupancy over the past nine years, SPH said.
It will be managed by Host, the student-facing brand of Victoria Hall Management, with more than two decades of industry experience. Host is one of the largest providers of purpose-built student accommodation in the UK and manages more than 10,000 beds across 24 cities in Europe.
The latest acquisition expands SPH’s purpose-built student accommodation portfolio to 5,343 beds across 11 cities in the UK and Germany.
Ng Yat Chung, chief executive officer of SPH, said on Thursday: “We continue to seek high quality, cash-yielding assets for our purpose-built student accommodation portfolio and grow recurring income.”
The proposed acquisition is not expected to have any material impact on the group’s net tangible assets or earnings per share for the fiscal year ending Aug 31, 2020.