Blackstone Group Inc. agreed to buy the iQ Student Accommodation business from Goldman Sachs Group Inc. and the Wellcome Trust in the largest-ever private real estate deal in the U.K.

Funds managed by Blackstone will pay 4.66 billion pounds ($6 billion) for the business, which owns and manages properties with more than 28,000 beds in the U.K., according to an emailed statement from Goldman Sachs. The deal is subject to regulatory approval.

“This acquisition is a continuation of our strategy to invest in high-quality assets and businesses in the U.K. and testament to our long-term belief in the U.K.,” James Seppala, Blackstone’s head of real estate in Europe, said in the statement.

Private-equity firms are betting heavily on U.K. real estate, which has lagged other western European markets since the Brexit referendum in mid-2016. Student housing has been a particularly popular bet, as students vastly outnumber the rooms available in purpose-built accommodation.

Blackstone has a long track record in the sector, with iQ the third student-housing business the fund manager has invested in since 2006. It’s also the latest in a series of substantial U.K. real estate investments for the alternative asset manager that include a large portfolio of railway arches and a low-income housing business.

Blackstone plans to invest heavily in the business, which has a development pipeline of about 4,000 beds. A substantial proportion of the 77 existing properties are also in need of refurbishment, according to a person with knowledge of the matter.

About half of the portfolio is located in London, with the remainder spread across cities and university towns that are home to the U.K.’s top academic institutions. The concentration on top universities, particularly in London, means many of iQ’s biggest tenants are overseas students, with just a third coming from the U.K. About half existing residents come from outside the European Union.

The U.K. government said last year it aims to increase the number of international students studying in the U.K. by more than 30%.

Most of Blackstone’s investment is being made on behalf of its 10 billion-euro Blackstone Real Estate Partners Europe VI fund, said the person, who asked not to be identified because the information is private. The deal could pave the way for an initial public offering of the business at some stage in the next decade, when the fund nears the end of its life, the person said.

The Wellcome Trust, a charitable foundation established with the legacies from the pharmaceutical magnate Sir Henry Wellcome, was among the founding investors of iQ in 2006. The business merged with Goldman Sachs’s student housing company in 2016.

Goldman Sachs International, Morgan Stanley and Eastdil Secured advised Goldman Sachs’s merchant banking division and the Wellcome Trust on the sale, according to the statement. Bank of America Corp., Citigroup Inc. and Savills Plc represented Blackstone in the acquisition.