Singapore-listed Far East Orchard‘s inaugural UK student housing fund has raised an initial £70m (€82.5m) of its £100m target.
The real estate investment trust’s UK arm Far East Orchard Investments UK has committed £35m to the FE UK Student Accommodation Development Fund (FESAD) which has been seeded with a development site, which the group bought in Glasgow in March this year.
The site is earmarked for a 273-bed student accommodation project.
Alan Tang, group CEO of Far East Orchard, said the establishment of a UK purpose-built student accommodation (PBSA) FESAD fund in Singapore marked a key cornerstone for Far East Orchard.
“Having been in the UK PBSA business since 2015, we have established a track record in the market and remain confident in the sector given its strong fundamentals, robust student demand, and structural supply-demand gap.”
He added that Far East Orchard acquired in April this year a 49% stake in Homes For Students, UK’s largest independent PBSA operator, enhancing the operating management capabilities of the group’s PBSA business and strengthening its position in the PBSA sector in the UK.
“Moving into the fee-based investment management business is a natural progression in addition to our current operating fee-based model to leverage our investment and asset management capabilities in the PBSA business in the UK,” said Tang.
“It allows the group to grow its recurring income stream as it steers towards an asset-light business model, ultimately reducing its balance sheet exposure and delivering greater sustainable value to shareholders.”
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