Malaysia’s second largest pension fund, Kumpulan Wang Persaraan Diperbadakan (KWAP) has made its first UK student housing acquisition in partnership with 90 North Real Estate Partners.
The $34.5b (€29.49bn) pension fund together with 90 North have bought a portfolio of two newly developed purpose-built student accommodation assets from IP Investment Management (IPIM) and Maven Capital Partners for £39.7m.
The portfolio consists of the 257-bed The Mill House in Edinburgh and the 103-bed studio student accommodation asset known as 800 Bristol Road in Birmingham. The Mill House was sold for £25.1m and Bristol Road was sold for £14.6m.
Dato’ Wan Kamaruzaman Bin Wan Ahmad, KWAP’s CEO, said: “Acquiring these assets from IPIM and Maven meets KWAP real estate investment objectives for targeting strategic, diversified portfolios in foreign markets with a focus on revenue-generating portfolios.
“KWAP is pleased to be working with a UK-headquartered investment partner, 90 North, a company with a global reputation for its ethical investment approach.”
This is KWAP’s first acquisition of a student housing portfolio in the UK and will provide a platform for further investment in the rapidly growing sector. The fund in 2014 invested in a UK shopping centre.
Selina Williams, the executive director at IPIM, said: “KWAP’s acquisition shows the ongoing institutional demand for high quality operational assets such as the Mill House and 800 Bristol Road.
“IPIM will continue to work with Maven to develop UK purpose-built student accommodation schemes following this successful exit of our first developments together.”
Philip Churchill, the founder and managing partner at 90 North, said: “We’re excited to have created this opportunity for KWAP to enter the UK’s attractive student accommodation sector. The two properties forming part of this deal are low-risk, incoming generating assets, that have been developed by the current owner IPIM and the asset manager, Maven.
“Our extensive knowledge of the sector, underpinned by an outstanding investment track record, means we’re in an excellent position to help KWAP acquire steady income assets with rental and capital value growth potential.”
Andrew Whiteley, Investment Director at Maven, said: “We are delighted with the return on investment these high-quality student properties have achieved for investors.
“The purpose-built student accommodation sector continues to offer excellent opportunities for institutional and overseas investors, such as KWAP and 90 North to acquire income generating assets and following the success of the first exits we have completed with IPIM, we look forward to continuing our relationship to identify new sites for development.”