Student accommodation developer Unite Students has bought a new 800-bed site in Paddington from Travis Perkins, the company announced today.
Total development costs for the project are expected to be £150m, which will be funded through proceeds from its last equity raise.
Unite is planning to open the development – its second partnership with Travis Perkins – in time for the 2023/2024 academic year.
The company said that the project would provide a yield in line with its enhanced rates for central London university projects.
Unite said it had let out 88 per cent of its available accommodation for the current academic year, down 10 per cent on last year.
It added that 80 per cent of students renting rooms had now checked in, with the remaining 8 per cent expected to do so in January.
Unite is forecasting a reduction in rent income of up to 20 per cent this year, excluding cancellations as a result of coronavirus.
The pandemic has caused a great deal of uncertainty for students, with some electing to defer university places for a year.
Chief executive Richard Smith said: “Our latest land acquisition means we have now secured £175m of new development opportunities since our recent placing.
“This is a rare opportunity to acquire a zone 1 central London site in an excellent location, which will help to meet the growing accommodation needs of our London-based university partners.
“We have continued to welcome students to our properties over the past month, reflecting the value they place on the learning, socialising and independence that university provides.”