UK - Private equity firm UPP last week won a contract to build undergraduate accommodation for the UK’s Loughborough University – an indication of increasing competition in a market gained momentum as a niche within a saturated real estate sector.
The £60m investment will be used to build 1,300 rooms across a series of low-rise campus buildings.
UPP, the joint venture between 3i and Barclays Private Equity, will manage the accommodation under a 30-year agreement with the university.
The firm already manages more than 16,000 rooms across the UK.
But Unite, the UK student accommodation firm that is 4% owned by the €211bn Dutch pension fund ABP, denied UPP was encroaching on what had been its near-monopoly in the market.
Spokeswoman Tabitha Aldrich-Smith pointed out UPP builds under partnership models with universities for first- and second-year undergraduates whereas Unite, in contrast, develops its own accommodation for third-year undergraduates and postgraduates at the "hospitality" end of the market.
Unite last week reported "good progress" in the year to date, including a 38% year-on-year increase in its pipeline for 2007 completions and planning permission for 10 new projects, four of them in London.
In a trading statement issued to the London Stock Exchange, the group pointed to a 5.2% increase in the number of undergraduate applications at UK universities, and demand from overseas students as an "important and growing area".