Unite Group plc said its Unite Students division, a developer of student accommodation, has exchanged contracts to acquire a development site near the University of Manchester for about £41 million on a “subject to planning” basis.
The site would provide flats for around 450 students.
“The acquisition is forecast to cost around £41 million and deliver returns in line with our targeted level of 8.0-8.5% development yield,” said Unite.
“The development will be funded internally and is anticipated to be delivered for the 2020 academic year. The acquisition increases the development pipeline to 7,500 beds underpinning our earnings growth outlook.”
Unite said Manchester was a strong performing market with two high quality universities and a total of 63,000 students seeking accommodation.
The site would increase Unite’s Manchester portfolio to 2,800 beds,.
Unite Group property director Richard Simpson said: “This acquisition extends our high-quality development programme in a strong regional location where there is growing demand for purpose built student accommodation.
“Manchester is a thriving student city which we expect to continue to attract high numbers of students.
“We look forward to working with the local universities to help meet the strong demand for high-quality student accommodation.”