Q Investment Partners has formed a joint venture with Soilbuild Group on a £200 million ($245.5 million) UK student housing platform, as the Singapore-headquartered companies look to profit from one of the more resilient asset classes favoured by Asia-based investors.
The fund will be seeded with two development projects in York and Newcastle with a combined 650 beds, accounting for roughly 50 percent of the platform’s expected assets, private equity firm QIP said Thursday in a release. Both properties are to be operated by the Prestige Student Living brand of Homes for Students, a British provider of purpose-built student accommodation.
QIP and property investment group Soilbuild have capitalised and underwritten the build-to-core platform, which is seeking limited partners to invest in up to 45 percent of the equity. No further details were given about the JV’s structure.
“The PBSA sector continues to be increasingly attractive to institutional investors,” said QIP co-founder and CEO Peter Young. “This partnership demonstrates our continued commitment to the sector and will see QIP leverage our existing platform scale to address the growing demand for high-quality student accommodation in the UK.”
Scope for Expansion
The £200 million platform has further scope to scale up to £400 million, QIP said, citing Knight Frank data showing that the supply of accommodation has failed to keep pace with the increase in students at UK universities and colleges.
Full-time undergraduate numbers are forecast to rise 16 percent between 2023 and 2030, according to a recent Knight Frank report. That would represent a surge of 263,000 students in real terms.
“QIP and Soilbuild have significant expertise in providing a full spectrum of real estate solutions, and through this strategic partnership with QIP, we are leading the way to build a scalable portfolio of UK PBSA assets to address the structural undersupply of quality student accommodation in the market,” said Soilbuild director Lim Han Feng.
The JV partners will have plenty of company among Singaporean investors in the local market, with sovereign wealth fund GIC having recently acquired Student Roost, Britain’s third-largest student accommodation provider, alongside US developer Greystar. That deal followed GIC’s previous tie-ups with British operator Unite Students and Dubai-based Global Student Accommodation Group on two separate investment vehicles.
Last December, SGX-listed City Developments Ltd beefed up its student housing portfolio in the UK with the acquisition of five properties for £215 million ($266.5 million).
Prestige Student Living has 40,000 beds under management in over 50 UK cities, including the student accommodation portfolio of Temasek-controlled Mapletree Investments.
QIP and its principals have managed more than $1.2 billion worth of real estate investments in developed markets including the US, the UK and Japan.
Last June, the private equity real estate firm launched a Japan-focused multi-family fund and joint venture with Alyssa Partners after acquiring a seed portfolio of three stabilised assets with a combined value of $40 million.
Closer to home, Soilbuild last September joined a Chinese-led consortium to acquire a residential site within Singapore’s Lentor Hills estate with a bid of S$481 million ($345 million). Soilbuild and United Engineers, a unit of Shanghai-based Yanlord Land, are developing the 470-unit Lentor Central near the new Lentor MRT Station.