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St. Modwen Properties PLC

St Modwen

Date
December 2018

Sector
Education

Transaction
Student Accommodation

Value
£87.3m

Role
Financial Adviser (sell-side)

QMPF was the lead advisor to St. Modwen Properties PLC, a FTSE 250 developer and regeneration specialist, on the sale of its 2,029 bedspace purpose-built student accommodation asset to UPP.

The sale of the 45 year lease hold interest in the accommodation at Swansea University’s Bay Campus generated a total cash consideration of £87.3m, and will see UPP manage the accommodation in partnership with the University for the remainder of the concession period. 

UPP’s funding solution comprised £63 million of index-linked bond debt from Pension Insurance Corporation (PIC), split across two debt tranches of £45m and c£18m (with tenors of 44 and 37 years respectively) and UPP Group shareholders investing £35m million of subordinated debt and equity. The existing 45 year senior funding of the first two phases of residential development on the campus from M&G remains in place within the project. 

QMPF’s role included managing the sales process on behalf of St. Modwen, approaching potential purchasers, amending existing project documents to facilitate a leveraged project finance solution to fund the transaction – working with all stakeholders to deliver the deal and provide the basis for a sustainable long-term operating partnership.  The project company also required an independent credit rating from Standard & Poor’s as part of the debt issue process. 

The success of the transaction has allowed St. Modwen to recycle funds for further phases of development at the Bay Campus.

QMPF was the lead advisor to St. Modwen Properties PLC, a FTSE 250 developer and regeneration specialist, on the sale of its 2,029 bedspace purpose-built student accommodation asset to UPP. 

The sale of the 45 year lease hold interest in the accommodation at Swansea University’s Bay Campus generated a total cash consideration of £87.3m, and will see UPP manage the accommodation in partnership with the University for the remainder of the concession period.  

UPP’s funding solution comprised £63 million of index-linked bond debt from Pension Insurance Corporation (PIC), split across two debt tranches of £45m and c£18m (with tenors of 44 and 37 years respectively) and UPP Group shareholders investing £35m million of subordinated debt and equity. The existing 45 year senior funding of the first two phases of residential development on the campus from M&G remains in place within the project. 

QMPF’s role included managing the sales process on behalf of St. Modwen, approaching potential purchasers, amending existing project documents to facilitate a leveraged project finance solution to fund the transaction – working with all stakeholders to deliver the deal and provide the basis for a sustainable long-term operating partnership.  The project company also required an independent credit rating from Standard & Poor’s as part of the debt issue process. 

The success of the transaction has allowed St. Modwen to recycle funds for further phases of development at the Bay Campus.

Martin Tresidder, Development Director of Major Projects at St. Modwen said:

"St Modwen Properties PLC has been lead developer for the Swansea Bay Campus where in under 10 years: 1.5M sq ft of academic space, 2500 student accommodation rooms, with a development value in excess of £450M has been delivered.  QMPF acted as lead advisor to St. Modwen’s sale of its 2029 bed purpose build accommodation development to UPP in 2018. QMPF is also acting for St. Modwen on additional projects throughout the campus at various stages of the development process.  QMPF has provided, and continues to provide, St. Modwen with expert advice and exemplar support in all that we have asked from it. QMPF’s experience , knowledge, and commercial acumen has been critical to St. Modwen and our successful delivery together with the building of great relationships.

St Modwen Properties PLC has been lead developer for the Swansea Bay Campus where in under 10 years: 1.5M sq ft of academic space, 2500 student accommodation rooms, with a development value in excess of £450M has been delivered.  QMPF acted as lead advisor to St. Modwen’s sale of its 2029 bed purpose build accommodation development to UPP in 2018. QMPF is also acting for St. Modwen on additional projects throughout the campus at various stages of the development process.  QMPF has provided, and continues to provide, St. Modwen with expert advice and exemplar support in all that we have asked from it. QMPF’s experience , knowledge, and commercial acumen has been critical to St. Modwen and our successful delivery together with the building of great relationships."

For further information contact

Stephen Bell

Partner

+44 (0)131 222 2603

QMPF LLP, Excel House, 30 Semple Street, Edinburgh EH3 8BL
+44 (0)131 222 2600
info@qmpf.co.uk

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