)
Two companies looking to make money from student accommodation property in unconventional ways have gone bust in the past few months.
A company looking to build student accommodation schemes and then sell individual rooms to small-time investors has gone into administration, according to the Financial Times. The 19 buildings had a potential end value of £100M, the FT said.
A1 Alpha Properties (Leicester) was building or had bought 19 student accommodation blocks in towns and cities across the UK including Stoke, Loughborough, Bradford, Preston, Leicester and Huddersfield.
It sold individual rooms to investors for around £75K. The plan was for the company to lease and manage the properties, collect the rent from students and then pay investors an annual return of 8% to 12%.
But some of the schemes were delayed or not fully let, and income was not enough to cover ground rent and services charges to the freeholder of the properties. Investors weren’t paid, and as a result the company was put into administration.
The administrators are working to try to ensure investors receive their money back, the FT said.
Another company seeking to capitalise on the student sector has also gone into administration.
Hashtag Hotels was a hotel operator looking to lease student rooms to travellers outside of term time. It had 17 sites across the UK and 264 staff.
Leonard Curtis' Neil Bennett and Andy John were appointed joint administrators of Hashtag Hotels on 28 August, a statement said. The statement added the company was placed into administration by its directors after it experienced financial difficulties. It had only been running for six months.
)
)
)
)
)
)
)
)
)
)
)
)