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Tadhamon seals UK students facility deal

Manama, January 10, 2012

Tadhamon Capital, a Bahrain-based Islamic investment company, said it has reached an agreement with UK developer Watkin Jones for joint ownership of Athena Hall, a prime purpose built student accommodation block in London.

The Athena Hall was developed by Watkin Jones in 2010 and is part of a new university campus benefiting from a five-year rental guarantee across the whole property and a 30-year nomination agreement with University Campus Suffolk.

The transaction valued at GBP26.7 million ($41.3 million) was co-arranged by Tadhamon and Apache Capital Partners, a Bahrain and London-based UK real estate investment manager.

The transaction was concluded at a net initial yield of 7.3 per cent and will distribute a quarterly net cash yield of 8 per cent per annum to investors, said a statement from Tadhamon Capital.

The Athena Hall, located in Ipswich, about 70 miles north east of London, is the only purpose built student accommodation property on campus and current demand significantly outweighs supply.

Rent currently charged to students is estimated to be 20 per cent below open market rental values, allowing for strong rental growth potential on review (every 5 years), alongside annual reviews of RPI+0.5 per cent, said the company statement.

The property comprises 590 rooms, 6 retail units and a dedicated car park, and will be operated and managed by Fresh Student Living, a specialist student accommodation company and a subsidiary of Watkin Jones.

Waleed Abdulla Rashdan CEO of Tadhamon Capital said, "This deal follows our acquisition of a special needs school in Hampshire in fourth quarter of 2010 and forms part of our social infrastructure strategy."

Social Infrastructure as defined by Tadhamon Capital and Apache Capital Partners includes the sectors of student housing, healthcare, education and social housing within the UK.

"We have selected social infrastructure as our core strategy as this sector will continue to be resilient in uncertain times, with growing institutional interest, and will allow us to provide secure income generating investment opportunities to our investors, with targeted distributions of 7 to 8 per cent annually," Rashdan stated.

"We are currently looking into our second student accommodation property which is located in a prime central London location with a capacity of more than 250 students, and hope to complete this transaction in the first quarter of 2012," he revealed.

"Under the same platform, we currently also have a number of transactions in the pipeline which are relatively advanced and we hope to complete our next transaction soon thereafter," he added.-TradeArabia News Service


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