Having established itself in the UK, US residential specialist Greystar Real Estate Partners is set expand across Europe using its Dutch business as a launching pad.
“In the Netherlands, we have a strategic partner who has provided a €250m equity commitment,” Wes Fuller, the executive managing director who runs Greystar’s investment management and European businesses from London, told IPE Real Estate.
“We have already acquired our first asset in the Netherlands and have a development pipeline for 3,000 units.”
In October 2015, Greystar made what is believed to be the single biggest transaction so far in the Dutch student housing market with the purchase of the 939-bed Campus Diemen in Amsterdam.
The acquisition price was not disclosed, but sources believe Greystar and its partner paid about €80m for the portfolio.
Fuller said the Dutch market has some product available for acquisition, so he expects the company to develop 70% of its student housing and multifamily assets, with acquisitions making up the balance.
“When Greystar looks to expand to a new market, it looks at the viability for all of our rental housing businesses – student housing, traditionally multifamily and senior housing,” Fuller said.
He believes the UK, Netherlands and other continental European markets offer potential in all three sectors.
Fuller said Greystar’s entry strategy would depend on individual markets “and whether the product exists in the form that we prefer or whether we have to develop the assets ourselves”.
“If you look at the UK market as an example, the student housing market is established thus assets exist to acquire – so we accumulated a large portfolio through acquisitions.
“On the other hand, multifamily or PRS product does not exist in London, so we are developing this product ourselves.”
In the UK, which was Greystar’s first stop in its offshore expansion, Greystar has an ownership interest in 28,000 student beds under two separate partnerships and a multifamily development pipeline of over 2,500 units.
Fuller said the UK remains Greystar’s key focus market, and it plans to grow its assets under management in the student and multifamily sectors.
He added: “We would like to be the largest owner and operator of purpose-built rental residential in the UK.”
Earlier this year, Greystar, Goldman Sachs and Wellcome Trust formed a £2bn (€2.57bn) joint venture, Vero Group, which holds some 23,500 beds across 59 sites in the UK, operating the under the Prodigy Living and IQ property brands.
This followed another acquisition of a student housing portfolio under a separate partnership with 2,400 luxury units in central London for a reported £600 million from private equity group Round Hill Capital 12 months ago.
Along with previous acquisitions, Greystar and a strategic partner own approximately 5,000 beds in central London under the property brand Chapter.
Greystar entered the UK market in 2013 through the purchase of a portfolio owned by Opal Property Group for a reported £300 million.
“There was some level of distress within the sector, so we choose to acquire assets from lenders or owners who were motivated to sell in bulk”.
Fuller explained that the offshore expansion programme was driven by the strong fundamentals for student housing in the UK and European markets, in addition to a willingness of existing partners to support the expansion.
“We came to the UK because we liked the fundamentals of the sector, the entry pricing and the availability of quality assets. We also liked the prospect of acquisition-led opportunity which would allow us to reach scale quickly.”
Greystar is a quintessential US company, which made the move to go offshore three years ago because it felt like the right time to export its relationships and resources to another market with strong property fundamentals.
But Greystar is not stopping at the UK. It is looking at Europe and beyond – including the Netherlands, Mexico and Australia – for fresh opportunities.
All told, Greystar manages 410,000 units, mainly for institutional investors, making it arguably one of the largest, if not the largest, institutional residential players in the world.