(Bloomberg) -- Blackstone Inc.’s IQ Student Accommodation business has bought properties in London and Edinburgh as the private equity firm continues to bet on the shortage of purpose-built housing in the UK’s top university cities. 

The landlord has acquired Vega, an 841-bed property in London’s Vauxhall district and The Mont, a 324-bed property in central Edinburgh, according to a company statement Wednesday. The combined value of the acquisitions, which were purchased from Downing Students, is about £370 million ($449 million), people with knowledge of the terms said, asking not to be identified as the details were not public. A spokesperson for Blackstone declined to comment on the price. 

Rising interest rates, shifting work patterns and growing demand for energy efficiency have roiled the UK property market, crimping valuations for swathes of commercial real estate. But pockets such as student housing, where demand for purpose-built accommodation near top universities significantly outweighs supply, have continued to see strong rental growth. 

“London and Edinburgh are two of the UK’s most attractive student cities, with world leading educational institutions attracting students from both across the UK and abroad,” said Samir Amichi, Blackstone’s head of real estate acquisitions in Europe. 

Blackstone bought IQ from a Goldman Sachs Group Inc. venture for £4.7 billion in 2020 and has continued to add to its portfolio. The business now owns 81 properties that comprise 33,000 beds, all of which are located close to the so-called Russell Group of top UK universities, the statement said. 

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