AZ Real Estate are proud to announce a sizeable acquisition of City Edge, a contemporary 136-apartment student accommodation block in Birmingham, on behalf of a private Russian buyer.
Purchased on a leasehold basis for £10.6m, City Edge is located just a short bus ride from the Birmingham City University South Campus, which is the subject of a £41 million state-of-the-art expansion. Fully tenanted, the accommodation was converted from office space in 2016 and includes a ground floor retail unit that is currently occupied by Guitar Guitar limited, with combined income for the building delivering an attractive net initial yield of 7.5%.
Birmingham has fast emerged as a highly attractive and prudent business destination, with PwC ranking it ahead of London as one of Europe’s best investment prospects. In addition to a growing domestic and international student population, which already extends to over 63,105 students across five higher education institutions, the city will become the recipient of Government infrastructure investment by playing host to a pivotal stretch of the landmark HS2 rail project. The Curzon investment Plan, a 30 year economic and housing masterplan designed around the arrival of Hs2, is expected to create 36,000 jobs and 4,000 new homes, generating an uplift of £1.4bn to the city.
City Edge, purchased with a lease of 111 years, is currently managed by Homes for Students. In addition to high specification studio apartments arranged over the first to fifth floors, there are staff offices, bicycle storage and laundry facilities.
Alisa Zotimova, founder and CEO of AZ Real Estate, comments: “This represents a significant acquisition with a strong long-term yield thanks to a highly buoyant student market, with limited supply of purpose built accommodation. Birmingham is the UK’s second city, with an attractive “knowledge economy” that will continue to prosper, giving us confidence in this investment for the future.”
“The acquisition is also indicative of an emerging shift in investment trends, whereby clients are willing to forgo traditional trophy assets in favour of those with stronger long-term returns and projectable cash flow, many of which are now outside of the capital.”
AZ Real Estate advised the client on the whole process of transaction, including sourcing the project, negotiating the terms, winning the bid, coordinating lending, legal support and surveys, through to exchange and completion.