UNITED STATES- There are increasing signs of additional pension fund capital moving into the student housing sector.
A series of indicators suggest there is renewed pension fund interest in the student accommodation sector including a move by RREEF to make its first investments after issuing a report on the property type.
Similarly, Wisconsin State Investment Board has invested capital into a student housing investment fund while Fidelity Real Estate Group has established a joint venture to invest in student accommodation.
RREEF is now seeking to make its first foray into student housing, according to Alan Billingsley, head of North America Research for RREEF, after the division of Deutsche Bank recently completed a research analysis of the property type. As a result, RREEF is now out in the market looking for student housing deals.
"There is a great deal of demand for student housing. Students at the major universities are always in need for more housing," said Billingsley.
"Returns are also typically higher than for traditional apartments. We feel that student housing transactions can produce yields that are 50-75 basis points higher than typical apartment deals.
"We are now seeking transactions for commingled funds. At some point in the future an investment could be done for a separate account client," he added.
RREEF will considering investing either in equity in new development projects or buying existing properties but would prefer assets that are at four-year major public universities around the United States, according to the fund.
Wisconsin State Investment Board has made a $100m ($73.7m euros) equity commitment to the Place-BV Student Housing commingled fund, increasing capital raised for the fund to $205m.
The commingled fund invests in a variety of student housing projects around the United States.
It recently completed two transactions in California, one of which was a $14m transaction for the 116-bed Allston Lofts property serving the University of California-Berkeley and the other was a deal valued at over $18m for the 436-bed Campus Place at California State University Fresno.
And Fidelity Real Estate has set up a joint venture with GMH Communities to acquire six student housing projects located in North Carolina, Texas, West Virginia and Tennessee. Fidelity has invested $19.8m of equity in the joint venture to give Fidelity a 90-10 split of properties with GMH.