Unite Students, the UK’s largest owner and operator of student accommodation, has made its first investment in the build-to-rent sector.

Unite Students has bought a 178-apartment purpose-built BTR scheme in Stratford, east London, for £71M, the company said in a stock market announcement.

It said it was piloting investing in BTR to see if it could take its expertise in student accommodation and apply it to BTR, which is often rented by young professionals.

Investors like Greystar have been investing in both student accommodation and BTR to keep residents in their properties longer, trying to catch them as they transition from students to workers.

“We already serve this market through the 9,000 postgraduate students who live with us each year,” Unite chief executive Richard Smith said. “This pilot BTR investment offers the opportunity to test our operational capability in the sector and understand the potential synergies with our student business.”

The property, called 180 Stratford, adds to Unite’s existing presence in the Stratford market, where it already operates 1,700 student beds and has two further student developments in its secured pipeline. The acquisition will increase Unite's scale in the Stratford market to around 3,700 beds.

The property offers 319 beds across a mix of one-, two- and three-bed units, as well as 11K SF of commercial space. The residential units are currently 99% occupied at average rents of £28 per SF.

The property is expected to produce a yield on cost of 4.3% following a planned refurbishment starting in 2023. The refurbishment will incorporate a rolling upgrade of the existing residential units, the creation of new amenity space and the addition of seven new residential units.

Unite said 180 Stratford will be integrated onto its operating platform and will leverage the company's existing operational capability for day-to-day management of the building and its development team for delivery of the planned refurbishment.