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The Canada Pension Plan Investment Board is selling a British student-housing company it bought four years ago but plans to hold a stake in the buyer.

The Unite Group PLC said Wednesday that it is buying Liberty Living Group PLC for £1.4-billion ($2.3-billion). The CPPIB bought Liberty Living in 2015 for £1.1-billion ($1.8-billion at today’s exchange rates). The numbers aren’t directly comparable because of changes in the company’s portfolio and capital structure.

The cash-and-stock deal will see the CPPIB hold 20 per cent of LSE-listed Unite Group after it closes. The CPPIB has agreed not to sell any Unite shares for at least a year, and it will place Thomas Jackson, a London-based managing director for real estate investments, on the Unite board.

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In a statement, Mr. Jackson said the deal allows CPPIB to continue investing in UK student housing “across a broader, more diverse and stable portfolio and with additional development exposure, which fits well within our global real estate strategy.”

Unite and Liberty Living are “student accommodation providers,” companies that own and operate housing for university students. The combined company will have 73,000 beds, and the deal boosts Unite’s presence in London, Manchester, Leeds and Birmingham. The Liberty Living portfolio had an average occupancy of 99 per cent over the past three years, Unite told its British shareholders.

Unite said it can ultimately cut £15-million (about $25-million) in costs by combining the two companies, adding that the CPPIB “recognizes the value of synergies and Unite’s operating capability.”

The deal will require the approval both of regulators and Unite shareholders. The companies hope to close it in the third quarter.

In a separate deal Wednesday, U.S.-based CBRE Group Inc. said its Trammell Crow subsidiary will buy British property developer Telford Homes for about £267-million ($438-million). Together the deals suggest big real estate companies are looking beyond the single-family-home market in Britain. Bob Sulentic, president and CEO of CBRE, said in a statement: “The U.K. is in the early stages of a secular shift toward institutionally owned urban rental housing, similar to what we have seen in the U.S. over the last two decades."

When the CPPIB bought 15-year-old Liberty Living from the Brandeaux Student Accommodation Fund in March, 2015, it said the investment fit in with its long-term philosophy and was “an ideal platform through which we can build further scale,” according to a statement by Andrea Orlandi, the CPPIB’s head of European real estate investments. “This sector is an attractive one for CPPIB, and we expect to see continued demand for well-located and well-managed student residences such as those within the Liberty Living portfolio.”

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