Europa Capital Partners, the pan-European real estate investment manager, is making a concerted push into the UK student accommodation market in partnership with Generation Estates.
The firm has launched Europa Generation as a joint venture created to manage a new UK student accommodation fund, it has revealed.
Europa said the Europa Generation Student Fund will invest in prime purpose-built student accommodation (PBSA) throughout the UK. The acquisition strategy is focused on investment opportunities where Europa Generation identifies potential for long-term sustainable income growth. The fund will acquire well-located assets, through forward-funding of new developments, direct development and selective investment acquisitions, it added.
Revealing further details, Europa said the new fund has used Europa’s balance sheet to acquire an initial £165 mln (€187 mln) seed portfolio, comprising 1,705 beds in six schemes currently being developed by Watkin Jones Group, a leading developer of purpose built student accommodation in the UK. The assets are situated in Oxford, Bath, Newcastle, Sheffield, Aberdeen and Bournemouth.
The schemes in Bath, Newcastle, Sheffield, Aberdeen and Bournemouth are due for delivery in time for the 2018-19 academic year while the Oxford scheme will welcome students for the 2019-2020 academic year. Europa Generation intends to build a portfolio of around 5,000 beds over the next few years.
It is understood that the maiden transaction was financed with £67 mln of equity.
Shortfall of purpose-built accommodation
Hugo Black, partner at Europa Capital, said in a statement: ‘Europa Generation is being launched to capitalise on the continuing shortfall of high-quality purpose built student accommodation in top tier university towns and cities across the UK as illustrated by the seed portfolio we have secured.’
Alan Artus of Generation Estates added: ‘We are delighted to have formed this partnership with Europa Capital to create a fund that will quickly become a leading investor in the PBSA sector in the UK. Our specialist skills and capability combined with Europa Capital’s undoubted expertise in fund management will provide investors with the opportunity to gain access to the robust long-term returns available in the sector.’
Generation Estates has developed and operated 4,500 beds worth more than £1 bn over the last decade across the UK. It was responsible for the development and operation of Pure Student Living, which was sold by The Carlyle Group for £535 mln in 2015.
Tim Turnbull, partner at Europa Capital, said Generation Estates had an ‘unrivalled track record in this flourishing sector’. He added: ‘Europa Generation will provide investors with access to individuals with a first-class track record in the investment, development and operational management of PBSA assets across the UK.’
News of Europa’s new UK student accommodation fund comes hot on the heels of the firm announcing a pan-Europe core-plus initiative with Mitsubishi Estate London. Marking the launch of that strategy, it said on 7 June it had acquired a 22,000 m2 multi-let office building in Unterfohring, Munich.
Europa Capital is also raising a €750 mln pan-Europe value added/opportunity fund.
