The Brandeaux Student Accommodation fund has confirmed that it will seek to repay investors through a flotation of its portfolio.
The assets, valued at £1.1 billion on 30 April, will be acquired by Liberty Living upon its stock-market listing; Liberty Living is a brand of Brandeaux.
Brandeaux stated the initial public offering would ‘create liquidity for its shareholders who want to redeem their investment and provide a structure to facilitate future redemptions’.
The group suspended its entire range of open-ended funds in July 2013 as the illiquidity of the portfolios meant Brandeaux struggled to meet redemptions.
Liberty Living is targeting a yield of around 5%, noting that for the year ended 31 August 2013 Brandeaux generated £81.5 million of rental and other income. The portfolio had a net debt level of £274.9 million at 30 April 2014.
‘Liberty Living offers investors access to an established and proven income-oriented student accommodation business,’ commented Roger Boyland, executive chairman of Liberty Living.
‘It operates in a market which benefits from attractive fundamentals, including an ongoing supply and demand imbalance, and limited correlation with economic cycles.’