London student digs giant iQ eyes float after £870m buy

The owners of London’s biggest student accommodation firm are poised to weigh plans for a possible float or major private investment by the end of the year, its chief executive has said.

Rob Roger, chief executive of iQ Student Accommodation, was speaking in the wake of its £869 million December swoop for Pure Student Living, which at a stroke made it the largest provider in London with 6700 rooms across 15 sites.

iQ, set up by Goldman Sachs and the Wellcome Trust two years ago to invest in student accommodation, now has a £3 billion-plus 28,000 rooms in 66 sites across the country, making it second only to accommodation firm Unite.

The chief executive was speaking as iQ added listed company experience to the board with the appointment of Penny Hughes, a non-exec at RBS and Superdry and chairman of the Gym Group, as its chairman.

Roger, whose portfolio is 98% occupied, pointed to strong revenue growth of around 6% as well as a pipeline of more than 2000 extra beds.

He said: “On that basis, by nature, you’re going to get investors interested in us.

“My job is basically to drive that growth. Driving that growth will then give that opportunity for other parties to come and invest in us.” Roger said it was “Goldman and Wellcome’s call to define” what happens next.

“By nature there’s strong growth which can support a strong dividend... whether you want to go for a float, or gauge institutional interest. There are a lot of big pension funds from Canada, from Singapore who are also interested in these estates. There’s a lot of opportunity there.”

Immediate action in the next six to nine months is unlikely while Pure is integrated but Goldman and Wellcome will start considering options by the end of the year “if the market is still strong”, Roger added.