Barclays gets out of student housing with £840m sale

Barclays has sold its 60 per cent share of the UK's second-largest student-housing operator to a Dutch pension fund manager in a deal valued at £840m.

Although PGGM of the Netherlands did not disclose what it paid for the stake in UPP, it did say the company is worth £1.4bn.

UPP manages dormitories for 11 UK universities, housing about 22,000 students and generating annual rental income of £104m.

The company is planning to invest £1bn in the next two years to build and renovate college facilities, which would increase its yearly rental revenue to £133m, according to the statement.

Henk Huizing, PGGM's head of infrastructure, said: "The inflation-linked, stable cash flows are an excellent match with our clients' liabilities."

Barclays Infrastructure Funds Management hired UBS two years ago to sell all or part of the investment.