UK - Barclays Capital is to sell part of University Partnerships Programme (UPP), its on-campus student accommodation manager, in a bid to raise £800m (€933m) for projects that will double the size of its portfolio.
The programme, which has an annual £67.8m turnover, owns and manages student accommodation at 11 UK universities, with a further 20 targeted for development to 2013. The UPP model comprises long leases under joint ventures with university partners.
A spokesman for the programme said BarCap had no idea who the likely buyers might be, adding that the sale announcement was an exploratory move.
In a press statement, the programme said it was considering "a number of refinancing options". The programme raised £250m funding for university projects in 2009.
Although the UPP spokesman would not confirm UK press reports that the partnership was courting four or five pension funds (or whether the parent would seek to target UK institutions), student accommodation has become an increasingly attractive sector for pension funds looking to hedge recent volatility by targeting rental income streams.
UPP also indicated it would expand its asset management across the sector, raising the possibility that it will manage the assets of other providers - against countrywide maintenance costs it estimates at £4bn. Its other major competitor in the UK market is the UNITE Group, which was not available for comment before going to press.
Those championing the university accommodation sector point to the fact that it is counter-cyclical, with low vacancy rates and with long-term demographics in its favour. The UK student body is forecast to increase from its current 2.4 million to three million by 2014.
UPP CEO Sean O'Shea pointed to "increasing interest" in the sector. US pension funds have been active in the sector, as have private equity groups such as Blackstone. APG, which has in the past owned more than 5% of UNITE, is no longer listed among the firm's major investors.