UPP announces Financial Close on new £43m deal

University Partnerships Programme (UPP), the UK’s leading provider of on-campus residential and academic accommodation infrastructure, has successfully reached financial close on a deal worth £43 million with St Modwen Developments, Swansea University and Swan Global LLP for the acquisition of the freehold of 411 rooms at Bay Campus, where UPP will deliver a full facilities management service.

The deal takes the number of rooms operated by UPP on the Bay Campus to 2,432 and boosts UPP’s portfolio of over 35,000 rooms in operation or under construction through long-term partnerships with 15 leading UK universities.

It comes on the back of a c. £98 million transaction between St Modwen Developments, Swansea University and UPP in February 2018, where UPP acquired two companies from St Modwen Properties PLC to operate 2,021 study bedrooms on the University’s Bay Campus, as well as acquiring a freehold property interest in further accommodation

This latest acquisition includes £38.7 million of index-linked debt financing from Aberdeen Standard Investments (ASI), with a debt tenor of circa 45 years. UPP Group Holdings Limited and its Shareholders will invest £4.7 million of subordinated debt and equity.

Swan Global Education LLP is a joint venture between Swansea University and Navitas, an international pathway course provider, which has underwritten 100% of the rental and utilities costs on the 411 rooms for the first ten years. Navitas will source international students to undertake pathway courses of varying lengths at the purpose-built college facility on the Bay Campus and residential accommodation will be provided via the 411 student residences.  Upon conclusion of the initial 10-year agreement, a further arrangement with Navitas could be negotiated – otherwise the accommodation is set to revert to a traditional offering to higher education students through the University.

UPP has been delivering facilities management services to the 411-room scheme for St. Modwen through its subsidiary, UPP Residential Services Limited, since the college opened in February 2019.

Richard Bienfait, Chief Executive Officer at UPP, said: “This latest transaction is testament to the strength of our long-term partnership with Swansea University. Through the partnership, first formed in 2018, we are helping to support and facilitate the University’s ambitious plans and long-term vision to enhance its position as a world-class educational establishment for the benefit of students, staff and the local community for generations to come.”

Andrew Rhodes, Swansea University’s Registrar and Chief Operating Officer, said: “Swansea University is committed to providing first-class learning, living and social facilities so that we can offer a truly transformational campus student experience combined with a global outlook. Our long-term partnership with UPP continues to provide high-quality accommodation for our students.”

Alex Campbell, Investment Director at Aberdeen Standard Investments, said: “We are pleased to partner with UPP to finance this project and to support Swansea University’s ongoing success. The investment provides index-linked cashflows, which are attractive to the participating insurance and pension funds and can help to match their long-term liabilities.”