1. BRITISH LAND COMPANY PLC ORD 25 626.00 -1.27% DERWENT LONDON PLC ORD 5P 2420.000 -1.681% GREAT PORTLAND ES
Student housing firm secures £305m debt deal
13 January 2017 | By Samuel Horti
Vero Group has rebranded as iQ Student Accommodation and secured a £305m debt facility
arranged by Morgan Stanley with participation from RBC Real Estate Capital Partners.
A communal area at iQ Leeds
The new five-year facility will be used to refinance existing debt secured against the Westbourne
portfolio, which was acquired in 2015 for £500m from Knightsbridge Student Housing.
It would also help create “substantial cashflow” for the company to reinvest in its existing
portfolio and potentially buy new sites, chief executive Rob Roger told Property Week.
“The new debt will be used to pay off shareholder debt,” he said. “Importantly, what it does is it
effectively frees up cash to reinvest back into the company.”
Specifically, the facility will enable iQ to invest in its new scheme in Glasgow city centre, which is
due to open to residents in September. It will also help the company to finance the rebuilding and
expansion of a scheme in Manchester and the construction of a new development in Sheffield.
‘Very selective’
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2. The financing deal follows a £375m five-year facility raised in June, which was arranged by Bank
of America Merrill Lynch.
The two deals leave the company, which is the second-largest student accommodation provider
behind Unite, with total debt of £1.15bn. The company’s loan-to-value across its portfolio of
23,500 beds and 54 schemes is 57.5%.
Roger also revealed that the company was looking for acquisitions, but added that it would be
“very selective” in any deals it chose to pursue.
If the right portfolio comes along, we’re not scared of buying - Rob Roger, iQRob Roger, iQRob Roger, iQRob Roger, iQ
“We don’t want to acquire for the sake of acquiring,” he said. “We want to be either growing our
market share in key markets where we’ve already got market strength or to go into new markets
at scale. If the right acquisition comes along, if the right portfolio comes along, we’re not scared
of buying.”
The business will target 25 ‘underserved’ markets in the UK, Roger revealed, singling out Glasgow
as a potential growth location.
“The markets I like are two-university towns [where] we have got great locations next to the
universities,” he said.
The company was formed last January by the merger of the Wellcome Trust-owned iQ and
Prodigy Living, which was owned by Goldman Sachs and Greystar.
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![The financing deal follows a £375m five-year facility raised in June, which was arranged by Bank
of America Merrill Lynch.
The two deals leave the company, which is the second-largest student accommodation provider
behind Unite, with total debt of £1.15bn. The company’s loan-to-value across its portfolio of
23,500 beds and 54 schemes is 57.5%.
Roger also revealed that the company was looking for acquisitions, but added that it would be
“very selective” in any deals it chose to pursue.
If the right portfolio comes along, we’re not scared of buying - Rob Roger, iQRob Roger, iQRob Roger, iQRob Roger, iQ
“We don’t want to acquire for the sake of acquiring,” he said. “We want to be either growing our
market share in key markets where we’ve already got market strength or to go into new markets
at scale. If the right acquisition comes along, if the right portfolio comes along, we’re not scared
of buying.”
The business will target 25 ‘underserved’ markets in the UK, Roger revealed, singling out Glasgow
as a potential growth location.
“The markets I like are two-university towns [where] we have got great locations next to the
universities,” he said.
The company was formed last January by the merger of the Wellcome Trust-owned iQ and
Prodigy Living, which was owned by Goldman Sachs and Greystar.
Follow @pwnews 59.5K followers
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