St. Modwen Properties Plc closed the sale of its 45-year leasehold interest in a purpose-built student accommodation in Swansea, U.K., to UPP Group Ltd. for a gross consideration of £139.3 million, including £87.3 million in cash.
The developer disposed of the entire issued capital of St. Modwen Properties VIII S.à.r.l. and St. Modwen (SAC 2) Ltd. and certain freehold interest under the deal that involves St. Modwen's interest in the 2,005-room property at Swansea University Bay Campus, as well as ancillary commercial leases.
The sale reflects a yield of 5.7% and is expected to result in the reduction of £5.8 million of net rental income in comparison with 2017.
The project was part of a larger £450 million, more than 1 million-square-foot development by St. Modwen in the 65-acre campus, according to a news release.
The company will use the sale proceeds to trim group borrowings and fund new projects, St. Modwen CEO Mark Allan said in the release.
