Singapore’s Far East Orchard Hits $130M Final Close of UK Student Housing Fund

Singapore’s Far East Orchard this week announced the final closing of its maiden private fund focused on purpose-built student accommodation in Britain, with the vehicle having secured £96 million ($129.5 million) in committed capital.

Institutional investors contributed 63.5 percent of the capital to FE UK Student Accommodation Development Fund as Far East Orchard retained the remaining stake, said the SGX-listed investment unit of regional builder Far East Organization. FESAD was launched last August with a hard cap of £100 million and has committed more than 35 percent of the raised equity to two PBSA developments, a 273-bed project in Glasgow and a 239-bed project in Manchester.

The latest milestone comes after Savills reported this month that student housing had overtaken multi-family as the top target of investors in European operational real estate. The final closing of FESAD just 10 months after establishment reflects investor confidence in Far East Orchard’s student housing strategy and execution capabilities, said CEO Alan Tang.

“Moving into the fee-based fund management business enables us to scale further with like-minded capital partners while deepening our recurring income base,” Tang said in a release.

Bed Pipeline Grows

The fund’s seed asset, a Glasgow site acquired in March of last year, is being developed with Singaporean construction firm Woh Hup Holdings to add 273 student beds in the Scottish city’s central Merchant City area. The University of Strathclyde and Glasgow Caledonian University are about one mile (1.6 kilometres) north of the site, while it takes a 15-minute drive to reach the University of Glasgow.

In April, Far East Orchard announced FESAD’s second development project, Plymouth Grove in Manchester, alongside Woh Hup and a third-party investor. The site lies within a three-minute walk of the University of Manchester main campus and will provide 239 student beds.

The Glasgow and Manchester projects are due to be completed in 2026 and 2028, respectively, while an under-construction 690-bed project in Bristol is expected to open in 2026. With those three projects, Far East Orchard’s PBSA portfolio will exceed 4,900 beds across 16 properties in key UK cities, including three existing properties in Bristol: the 301-bed King Square Studios purchased from LaSalle Investment Management in 2020, as well as the 166-bed St Lawrence House and Harbour Court, a 133-bed facility acquired as part of a £55 million deal in 2019.

Far East Orchard also invests in Homes For Students, Britain’s largest independent PBSA operator, having acquired a 49 percent stake in the platform in April of last year. Including HFS, the group’s total portfolio comprises over 55,000 owned and managed beds.

“With committed capital now deployed to two well-strategically located projects in Glasgow and Manchester, we are well-positioned to deliver on our development pipeline,” Tang said. “This closing marks a key milestone in the continued evolution of our lodging platform, with the fund management now complementing our existing investment and operating capabilities as we continue moving toward a more asset-light and sustainable business model.”

Appetite Undimmed

Singaporean investors have continued to target Britain’s PBSA sector, with Q Investment Partners having formed a £100 million UK student housing joint venture with Malaysian builder Gamuda Land last July to develop a 299-bed project in southeast London, marking the private equity shop’s 11th UK asset and first in London.

That deal came after QIP in 2023 formed a JV with Singapore-based Soilbuild Group for a £200 million UK student housing platform which was seeded with two development projects in York and Newcastle.

In December 2022, a joint venture of Singapore sovereign fund GIC and US developer Greystar acquired Student Roost, Britain’s third-largest PBSA provider, from a private fund of Brookfield. That same month, Singaporean builder City Developments Ltd beefed up its UK student housing portfolio with the acquisition of five properties for £215 million.

On the sell side, Mapletree Investments is marketing a set of 24 UK PBSA properties totalling 4,844 beds, as the Temasek-backed property firm continues to rejig its student housing portfolio.