Student flats development acquired in £20m deal

A property fund has bought a student accommodation development in Dundee for more than £20 million.

LXI REIT – a real estate investment trust – said the property acquired provides 413 beds and had undergone a significant refurbishment programme, completed last September. It is located in the centre of the city, within a five-minute walk of both the University of Dundee and Abertay University.

The property is fully let to Mears Group, a stock market listed provider of support services to the public and private social housing and care sectors.

The purchase price of £20.25m reflects a net initial yield of 6.3 per cent.

LXI said the acquisition was being funded using the proceeds of a new loan facility secured from Scottish Widows in December.

Simon Lee, partner of LXI REIT Advisors, said: “The acquisition provides a long-term, index-linked income stream at an attractive net initial yield, underpinned by an excellent location in a leading university city.”