Sunley Holdings sells Fulham Palace Studios to Aberdeen for £22.58m

Knight Frank’s Student Property team, on behalf of Sunley Holdings Ltd, has sold Fulham Palace Studios (London W6), a purpose built student accommodation development, to Aberdeen Investors for £22.58m. The price achieved reflects a blended net initial yield of 4.42%.

Fulham Palace Studios is a stabilised and leased student accommodation scheme comprising 74 beds and 9,131 sq ft of fully-let retail space in the Borough of Hammersmith & Fulham. The student accommodation element of the scheme is currently held on a lease to London Nest which expires in 2021, the ground floor commercial space is let to Tesco’s, Pret, Winkworth and Café Nero. The development’s total projected income for the 2019/20 academic year is c.£1.170m.

The scheme offers a rare opportunity to develop additional student bed spaces in a market with constrained supply, having the benefit of a consent granted to create 12 additional student accommodation units. This represents a 16% increase in total beds spaces.

Rory Gleeson, Director, Sunley Holdings Ltd, commented: “The Sunley Group remain committed to the Student sector, since having first become involved following our acquisition of this site in 2008. The professional team acting for both ourselves and Aberdeen have worked hard to facilitate and complete this transaction, and we look forward to seeking future opportunities in the student sector.”

Merelina Sykes, Partner, Knight Frank Student Property, commented: “London remains a key investment target for most student accommodation buyers, further enhanced by the London plan and the need to develop affordable rents in schemes moving forwards. Fulham Palace Studios is an exciting opportunity to provide high quality student accommodation in a highly accessible, prime London area.”

There are currently 297,337 full time students within London, of which c. 49,228 (16.6%) are offered accommodation by universities in halls of residence. A further c.51,195 (17.2%) students are offered accommodation by private sector landlords in purpose-built student accommodation.

Accordingly, c.196,914 (66.2%) full time London based higher education students are unable to access university or private sector purpose-built accommodation. There are 6,798 additional student bed spaces with planning consent, meaning that the undersupply will remain acute. If these beds are constructed then 64.0% of students will still not have access to purpose built student accommodation.

The scheme is located on Fulham Palace Road, opposite Charing Cross Hospital and within walking distance of Barons Court underground station, Hammersmith underground station and Hammersmith bus station, which offers transport connections into Central London via the District, Piccadilly, Circle and Hammersmith & City lines.