CDL Buys 5 UK Student Housing Assets for $266M

City Developments Ltd has beefed up its student housing portfolio in the UK with the acquisition of five properties for £215 million ($266.5 million), as the asset class continues to attract Singaporean investors to Britain and continental Europe amid a post-pandemic rebound.

The five assets in Birmingham, Canterbury, Coventry, Leeds and Southampton provide 1,863 beds and boast an average age of less than three years and an average committed occupancy rate in excess of 98 percent, CDL said Thursday in a release.

The SGX-listed property giant didn’t name the sellers, saying only that it made the acquisition via two separate transactions. The deal follows the £59.2 million ($72 million) June purchase of the group’s first purpose-built student accommodation, the 505-bed Infinity in the English city of Coventry, from investment manager Erec Estates.

“The UK student accommodation sector continues to demonstrate strong resilience as students return to campus post-COVID,” said CDL chief executive Sherman Kwek. “Our newly acquired assets are strategically located in cities where there is high demand but traditionally underserved by a lack of supply, providing further rental growth potential in the longer term.”

Beds Across England

The new additions to CDL’s portfolio include two properties managed by Manchester-based Prime Student Living — the 614-bed Trinity View in Coventry and the 117-bed Sycamore House in Leeds — and two developed by London-headquartered Linkcity: the 435-bed Altura in Birmingham and the 491-bed Riverside in Canterbury. A fifth, the 206-bed Cumberland Place in Southampton, was recently listed in the portfolio of British asset manager Apache Capital.

With the latest acquisitions, CDL’s student housing portfolio has expanded to six assets totalling 2,368 beds. The group also has a pipeline of more than 1,300 rental residential units at projects including The Junction in Leeds, The Octagon in Birmingham and CDL Hospitality Trusts’ The Castings in Manchester.

CDL in August posted a first-half net profit of S$1.1 billion (now $800 million), a record-high result propelled by a one-time gain from the group’s divestment of the Millennium Hilton Seoul hotel. The developer controlled by the Kwek family swung into the black after having announced a net loss one year earlier despite Singapore’s property boom.

As the city-state’s largest non-government-backed builder, CDL has sought to turn the page after its ill-fated investment in China’s Sincere Property Group and a rough ride for its hospitality business during the COVID-19 crisis.

School’s Still In

Singaporean investors have piled into student housing this year, led by sovereign fund GIC, which joined with US rental housing operator Greystar to acquire Britain’s third-largest student accommodation provider, Student Roost, and also secured a “substantial” stake in Amsterdam-based The Student Hotel alongside Dutch pension fund manager APG.

In June, Far East Orchard hooked up with two fellow Singapore-based investors on a £26.6 million ($32 million) joint venture to build a student housing project in Bristol, marking the developer’s fourth property in the southwestern English city.

In October, Metro Holdings revealed that its Paideia Capital UK Trust had acquired four student housing properties in Exeter, Durham, Glasgow and Kingston for a total consideration of £74.4 million ($84.5 million) in a deal completed in May.