Two London-based investors have formed a joint venture to build a portfolio of 1,500 student homes across the UK.
CGI of the Roc Club student housing scheme in Elephant and Castle, south London (picture: Valpre Capital)
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Two UK investors to build 1,500-bed student housing portfolio #UKhousingTwo London-based investors have formed a joint venture to build a portfolio of 1,500 student homes across the UK #UKhousingValpre Capital and Katch Investment Group said they will build a portfolio of student homes with a target gross development value of £500m.
The joint venture between the private equity investor and asset manager will provide up to 1,500 purpose-built student beds in the next few years across London and Bristol, as well as one or two additional major regional cities.
According to the partnership, these locations continue to experience strong demand for student housing, which is driven by universities in the areas, rising domestic and international enrolment and persistent undersupply of accommodation.
The student housing sector is one of the country’s most resilient and undersupplied property markets, the joint venture said.
The duo are already building their first development: the Roc Club, a 244-bed purpose-built student accommodation (PBSA) scheme in Elephant and Castle, south London.
The Roc Club is currently being developed in partnership with CKC Properties and represents the first milestone for the joint venture, which expects to announce further acquisitions soon.
“As forward funding remains scarce, well-capitalised equity has a unique opportunity to secure high-quality PBSA developments at compelling entry points,” said Mazen AbouChakra, managing partner at Valpre Capital.
“The sector’s fundamentals remain exceptionally strong, and investors with patient capital and conviction are well positioned to capture long-term value in this dislocated market.”
Youssef Sbai, investment director – real estate private equity at Katch Investment Group, said: “The existing pipeline gives us confidence in the platform’s ability to scale and reach our target GDV [gross development value] of circa £500m.”
There has been quite a bit of partnership activity in recent weeks. Last month, investor Moorfield Group and Tiger Developments entered a £60m joint venture to build a 204-bed PBSA scheme on a brownfield site in Bristol.
According to the joint venture, there are approximately 60,000 students in Bristol attending the University of Bristol and the University of the West of England. Over the past six years, Bristol has also attracted 15,000 new students, but only 2,000 new beds have been developed.
European investment manager ActivumSG recently launched a platform to build a £500m portfolio of student accommodation in the UK.
The platform, which buys and upgrades PBSA schemes, said it plans to grow by targeting the sector’s unmet student demand for high-quality accommodation set against viability and planning challenges that are affecting new developments.
Private equity giant Blackstone and Pluto Finance entered a strategic partnership to provide development and investment loans targeting property owners and developers in PBSA, co-living and rental and for-sale housing in the UK and across core markets in continental Europe.
The partnership focuses on whole loan lending, ranging between £25m and £100m in size, with an initial target deployment of £2bn over two years.
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