Canada Pension Plan Investment Board (CPP Investments) has established a new real estate investment and operating platform focused on purpose-built student accommodation (PBSA) in continental Europe through two key deals with Round Hill Capital.
The new PBSA platform is being formed through CPP's acquisition of Round Hill Capital's minority stake in Round Hill European Student Accommodation Partnership, the existing joint venture between the parties.
CPP has also acquired Nido Living, Round Hill's European PBSA operator and manager. Through these combined transactions, CPP is investing up to C$40 mln (€27 mln) in the platform.
Operating as Nido, the platform will be backed by CPP's real estate investment strategy and will be a wholly owned, but independently operated portfolio company with pan-European exposure.
Going forward, the company will be focused on investing in and expanding the existing CPP Investments owned portfolio of over 5,000 beds, the majority of which has been operated by Nido since acquisition. Nido will also continue to manage high-quality PBSA assets for other international investors.
'CPP Investments and Nido together are well placed to meet the increasing demand across Europe for high-quality PBSA,' said Tom Jackson, managing director, head of real estate Europe at CPP Investments.
'Premium quality and affordable student housing is in high demand due to increased student mobility and growing participation in higher education. In Europe, student populations are increasing as labour markets upskill, resulting in growing pressure for accommodation, positioning this platform well to deliver strong risk-adjusted returns for the CPP fund.'
Round Hill Capital was sole owner of Nido Living for 12 years, having acquired the business in 2012. Round Hill Capital has grown its student arm into one of Europe’s leading PBSA providers, managing and/ or developing over 18,000 beds during the time.
Commenting on the disposal, Michael Bickford, Round Hill Capital’s CEO and founder, said: 'Since acquiring Nido in 2012, the business has gone from strength to strength, starting from three assets in the UK to managing over 18,000 student beds across the UK and Europe in this period, as well as diversifying into new territories.
'This transaction is testament to the value we have built in this award-winning business over the past 12 years and represents a successful conclusion of this investment. As an investment manager, Round Hill Capital continues to see significant value in the student and other residential sectors, which remain integral to our investment strategy going forward.'
