French student housing and co-living specialist Uxco Group is on a drive to boost its position at home while eyeing expansion in other European markets. CEO Maël Aoustin shares the firm's strategy with PropertyEU.
Uxco Group, a French investor, developer and operator of student and co-living real estate majority-owned by Brookfield, is looking to double its portfolio over the next five years as it taps into a heavily undersupplied market.
The firm, which is 90%-owned by the Canadian asset management giant, aims to increase its portfolio to 25,000 beds by 2027, according to CEO Maël Aoustin. ‘We managed 5,000 beds when Brookfield acquired the company in 2019. We have grown massively since then and have been able to double our portfolio to 12,500 beds, of which 6,600 are owned. With the pipeline we have secured we are aiming to double it once again over the next five years,’ says Aoustin.
To accelerate expansion, Uxco will rely on its development arm, Océanis Promotion, which represents the backbone of the company’s business. Uxco itself was in fact founded as a development company. Back in 2000, the business was launched by Patrice Cavalier, the entrepreneur who retains 10% of the business.
Since Brookfield’s entry, Uxco has been investing heavily in the development of purpose-built student accommodation (PBSA) residences. ‘We believe this business offers huge development potential, particularly in France, a market which is heavily undersupplied in terms of student facilities with only one bed offered for every 10 students,’ Aoustin comments.
‘This is one of the reasons why we will focus on France for the coming two or three years, targeting all of the country’s major cities. After that we will certainly start looking beyond France to expand in other European countries.’ In France, the firm currently operates 69 residences with a portfolio value exceeding €1 bn.
See also: Uxco snaps up student residences in France
Institutional players
For many years, the French student housing property market was dominated by individual owners because of tax incentives offered to private investors. This has recently started to change, with the space beginning to attract institutional capital. Oaktree Capital Management, which in 2014 took over student housing firm Group Kley, sold it to AXA Investment Managers - Real Assets in 2019, the same year Brookfield entered the segment.
Says Aoustin: ‘These tax incentives for private owners have led to a situation where there are very few institutional players – investors, developers and operators who are active in France, and the market is only at the beginning of a movement towards becoming more institutionalised, with Uxco leading this trend as the largest owner of student residences in France.’
Brookfield’s investment in Uxco is believed to be part of the US asset management giant’s strategy to grow through real estate portfolio companies in Europe. The group is investing massively in the PBSA sector and has developed several student housing and co-living businesses across Europe including, most notably, Student Roost in the UK (now owned by GIC and Greystar), International Campus in Germany and Temprano in Spain and Italy.
Geneva project
Uxco recently purchased a major co-living development near Geneva. The firm bought a former office building located in Archamps, near the border with Switzerland, which it plans to transform into a co-living residence for students and young professionals, representing a total investment of €90 mln.
Financed by lender Société Générale, the project will house 800 beds and more than 3,000 m2 of common spaces for students and young professionals and will be operated under the Ecla brand, one of two formats the group operates. Ecla focuses on scale; it is said to be the largest student housing concept in Europe with facilities that go above 1,000 beds per residence. Uxco’s other brand, Uxco Students, focuses on student housing sites offering between 150-350 beds.
‘Because of the large size of the Ecla facilities, this concept needs large catchment areas and a certain volume of students to take off,’ comments Aoustin. ‘The plan is to seek to expand the brand in France’s top 10 catchment areas including Bordeaux, Marseille, Toulouse and Lyon. On the other hand, with Uxco we do not need such a big market and we will be targeting all the French cities with a catchment area of over 20,000 students.’
