Legal & General has agreed to fund the development of new high-quality student accommodation block to a top Scottish University.

Lincam Pentland Ltd, a subsidiary of award winning Edinburgh housebuilder S1 Developments Limited, has completed the sale of the proposed new 315 room (359 bed) student residence, formerly known as Pentland House, on a forward funding basis for a purchase price of around £35 million.

The UK boasts many of the best universities in the world and has one of the world's strongest higher education systems. Attracting international students and academic talent, the higher education sector remains vital to the long-term prosperity of the UK economy. In order to support this strong demand from students, modern purpose-built accommodation is an essential part of a first class education experience.

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The property will be leased to the University on a new 20 year full repairing and insuring lease on completion of the development, which is scheduled for September 2020. The development is being carried out by S1 Developments, an established Edinburgh-based developer with a proven local track record.

Derek Gilby, Senior Fund Manager of the LPI Income Property Fund, said: "The quality and affordability of accommodation can represent a large factor for students when deciding where they want to go to University. We believe that quality facilities that are affordable for students can help to provide a quality education. This is an excellent buy for the fund, offering a secure long term income stream which provides a hedge to inflation from a top investment grade University."

Dan Teague of S1, added: "We are delighted to have concluded this transaction with Legal & General who are a perfect partner for ourselves. We will be providing exceptional accommodation for the University in time for the 2020/21 academic year. We are known for providing best in class housing and we hope for the same reputation within the commercial property world."

Launched in 2010, the LPI Income Property Fund offers defined Benefit pension schemes an innovative way to invest in direct property with secure, primarily government backed, inflation-linked sources of income, generating income yields well in excess of those from comparable asset classes such as index-linked gilts or social housing debt. The Fund has £1.3 billion of assets under management.