The Student Hotel, a hybrid European student housing and hotel brand, has acquired the majority stake held by a Carlyle Group fund in three of its student accommodation schemes in the Netherlands. The investment volume was not disclosed, but PropertyEU has learned that purhase price was €174 mln.
The investment transaction is believed to be the largest so far in the nascent professional student accommodation sector in the Netherlands.
Following a competitive sales process, the Amsterdam-based Student Hotel group agreed to buy the 85% share in the three properties located in Rotterdam, The Hague and Amsterdam West from CEREP III, a pan-European real estate fund established and managed by Carlyle. The assets were acquired via an existing €375 mln equity commitment provided by the Student Hotel's shareholders APG, the Dutch pension asset manager, and Perella Weinberg Real Estate Fund II.
First assets
'The acquisition of The Carlyle Group's 85% shareholding will allow The Student Hotel to consolidate and gain full control of these three properties. We are grateful to The Carlyle Group for its trust in a start-up that evolved into a leading and innovative model of accommodation,' Student Hotel founder Charlie MacGregor said. 'Without the commitment and assistance of Carlyle, we would not have been able to start addressing the shortage of quality accommodation across Europe with a new model that meets local and international student needs. The sale signifies that the European market for student accommodation is growing and maturing.'
The three properties were the first to be acquired and developed by a joint venture, which was established between MacGregor and The Carlyle Group in 2008.
The Rotterdam location was the first operation in the Netherlands and opened in 2012 with 256 rooms, doubling its capacity to 485 rooms in 2014. The Student Hotel Amsterdam West is the largest hotel in the Benelux, with 707 rooms. The location in The Hague opened with 310 rooms in the summer of 2014. All student rooms have been fully occupied since opening.
The vendor was advised on the transaction by Tim Edghill and John Gladstone of JLL Corporate Finance and Jorn Thoomes of JLL Netherlands.
Development drive
Scottish entrepreneur Charlie MacGregor founded The Student Hotel in 2006, and entered into a joint venture with Carlyle in 2008 to grow the portfolio. The Student Hotel aims to provide 'full-service, state-of-the-art accommodation with all-inclusive rates to students, trainees and travellers'. It currently operates 3,000 rooms across six cities in the Netherlands, Spain and France.
In addition to the Carlyle Group, the Student Hotel secured fund manager Perella Weinberg as an investor in 2013 while Dutch pension asset manager APG pumped €100 mln into the business in 2015. Now with €375 mln of equity committed by Perella Weinberg Real Estate Fund II and APG Asset Management, the Student Hotel is looking for development opportunities across the European continent. In the last two years it has committed equity and debt in the range of €400 to €500 mln.
New properties are under development in Italy and Germany, with the first Italian location opening in Florence in the summer of 2017. The ambition of The Student Hotel is to expand and strengthen its hybrid accommodation platform, totalling over 15,000 rooms by 2020.
Commenting on the sale, Nicky Barker, associate director of Carlyle said: 'Having identified a hugely undersupplied gap in the market for high quality student accommodation in Benelux, we first entered the market in joint venture with Charlie MacGregor in 2008 and over the following five years developed a high quality portfolio together.
'We believe the product we have delivered is first class and its strong operational performance is a real endorsement of what our asset management team can deliver. However, we also feel that now is the right time for us to exit what has been a successful investment on behalf of our investors.'
