Sanctuary Housing Association has secured a buyer for its substantial £400 million student accommodation portfolio, with Global Student Accommodation (GSA) set to complete the transaction. This move aligns with Sanctuary’s broader strategy to unlock and recycle capital, enabling reinvestment in its core affordable housing stock. The portfolio under sale includes 5,600 bedrooms spread over 21 student accommodation schemes in eight key locations: Manchester, Salford, London, Brighton, Bradford, Falmouth, Liverpool, Preston, and Ormskirk.

This strategic sale, initially announced in October 2024, marks a significant step in Sanctuary's financial repositioning. The association, which manages around 125,000 homes and provides housing and care services to over 250,000 people across England and Scotland, has been navigating financial challenges linked notably to its student property assets. In its 2024/25 accounts published recently, Sanctuary recorded a deficit near £30 million primarily attributed to property revaluations and development write-downs in this sector. This contrasts with the previous year's £207 million surplus, which had been bolstered by a sizeable one-off gain of £162 million linked to the acquisition of Johnnie Johnson Housing Trust.

Despite this deficit, Sanctuary’s overall financial health exhibits resilience. The group revenue rose by 8.7% to £1.18 billion in 2024/25, with its underlying operating surplus improving by £19.3 million to reach £226 million. Operating efficiencies and improvements were evident, with the association reporting high occupancy rates—95% for student accommodation and 90% for care homes—alongside a robust cash balance of £159.6 million and undrawn credit facilities amounting to £356.5 million. These figures ensure Sanctuary maintains approximately 23 months of financing against committed expenditure, providing a buffer amid market uncertainties.

Sanctuary’s student accommodation portfolio, valued at around £400 million, comprises purpose-built student housing assets in a range of urban centres, extending beyond the locations named in the sale announcement to cities like Dundee and Glasgow as well, as noted in broader reports. Ernst & Young was appointed to market these assets, reflecting the scale and complexity of the disposal. The association’s initiative to divest this portfolio aims to mobilise capital for further development and enhancement of its affordable homes, a sector regarded as central to its mission of building sustainable communities and delivering quality housing.

Operationally, the student accommodation assets include large properties staffed with on-site teams delivering 24-hour support, including caretakers, maintenance helplines, and online reporting systems to ensure resident safety and convenience. This operational model remains crucial to maintaining high occupancy rates and resident satisfaction, even as ownership transfers to new investors.

Sanctuary’s path reflects a broader trend among housing associations recalibrating their portfolios amidst changing market conditions. While sales income from developed properties dropped 35% recently, Sanctuary managed to increase its overall turnover, indicating strong rental income and operational revenue streams balancing the reduced sales proceeds. The association's focus remains on enhancing existing homes and addressing the challenges posed by site delays and fluctuating property valuations.

In summary, the imminent sale of its student accommodation portfolio to GSA represents a strategic financial manoeuvre by Sanctuary Housing Association to reinforce its core mission of affordable housing delivery. It demonstrates how the association is actively managing its asset base to sustain long-term financial resilience and resource availability for ongoing community investments.

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Source: Noah Wire Services