Far East Orchard acquires two UK student housing properties for around S$116 million

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Far East Orchard said Friday acquired two student accommodation properties in the U.K. from EF IV Student Portfolio Holding for 66.5 million British pounds, or around S$115.7 million.

The properties are The Foundry in Leeds with 239 beds and The Elements in Sheffield with 735 beds, Far East Orchard said in a filing to SGX. Both properties have been at full occupancy since opening in 2017 and 2018, respectively, the filing said.

The market value of the properties was around 71.8 million pounds as of 23 October, according to a valuation report by Jones Lang LaSalle, the filing said.

Leeds and Sheffield are among the top eight student population cities in the U.K., with sizable full-time student populations, Far East Orchard said, noting both cities have several higher education institutions.

After the acquisitions, Far East Orchard has a portfolio of 3,260 purpose-built student accommodation beds across 11 U.K. properties, the filing said.

“We have been on the journey to build our recurring income base. We are pleased that our strategic efforts are translating into results, with the continued growth of our student accommodation portfolio to 3,260 beds, ahead of our target to achieve 3,000 student beds by
2023,” Lui Chong Chee, group CEO and managing director, said in the statement. “We look forward to capitalizing on the favorable demand-supply dynamics across the six key student cities in the U.K. that we are currently present in.”

Far East Orchard will finance the acquisitions with a combination of internal resources and external debt facilities, the filing said.

On a pro forma basis, assuming the acquisition had been completed on 1 January 2018, earnings per share would have been 7.90 Singapore cents for the year, compared with 7.64 Singapore cents reported, the filing said.

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