Unite sees banks selling 1bn of student property
Britain’s largest student landlord Unite Group Plc said it expects Europe’s bank to sell 1 billion pounds ($1.6 billion) worth of student housing assets in the next 12 to 18 months, as such banks come under growing pressure to offload bad property debt.
Unite, which manages 40,000 student beds across Britain, said it would look at buying some of these distressed assets with partners, as most of its cash was tied up in its development pipeline.
‘Banks will become more proactive in forcing borrowers’ hands and forcing more sales … by the middle of next year I’d expect a lot of that to have already moved on,’ Chief Executive Mark Allan said.
‘It’s certainly something we will look at actively with other financial partners,’ he said, adding that distressed assets make up a tenth of the UK’s 11 billion pound student accommodation market, most being outside London.
Only a small number of such distressed student housing properties were sold in the past two years. However, Europe’s banks are facing mounting pressure to shrink their balance sheets to meet capital adequacy rules …