European Student Accommodation Fund

The Fund

Student Accommodation is proving to be a resilient property sub-sector in the current economic climate. It’s attractive to investors whose objectives are to seek uncorrelated investments which offer the potential for attractive yields and the prospect of long term capital growth.

Background

The Student Accommodation market in Europe’s major University towns and cities represents one of the best opportunities to achieve these objectives. There are several reasons why this sector of the property market has remained resilient to the global economic downturn:

  • Socially there remains an ambition amongst the younger generation to obtain higher education degrees.
  • Attending a University offers an alternative to entering what is currently an extremely challenging job market, and also access to financial support (for EU citizens) in the form of direct grants, subsidies and/or access to cheap loans.
  • Having successfully completed a University degree there is the perception of better career prospects.

Furthermore, the emergence of the new ‘middle class’ in developing countries, has resulted in a growing pool of potential overseas students studying at European universities.

The UK currently represents a more mature market, having been established in the mid to late 1990s, whereas in the rest of Europe this market has only recently begun to emerge.

The Student Accommodation market has delivered solid and consistent returns throughout every year of the recent economic downturn, as year on year growth of student numbers across the globe has continued to increase. Within this global increase Europe dominates the international student market, attracting 46% of all international students.

Objectives

The Fund has been established to take advantage of the rapidly developing European Student Accommodation sector and will provide investors with exposure to the evolving market.

The objectives of the Fund are:

  • To provide investors with diverse investment in the Student Accommodation market in Europe, whilst only investing in major University countries, cities and towns
  • To invest in a mixture of new developments and mature properties which will provide a combination of strong rental yields, initial added capital value and anticipated ongoing capital growth
  • To achieve target return of 8% to 10% p.a. before tax
  • To invest in Europe alongside local student operators/developers through partnership and joint venture arrangements, sharing risk with these operators/developers who have successful track records in their localities
  • To provide further diversification and risk education through:
    • A geographical spread across major University cities in Europe
    • Inclusion of ‘affordable’ older schemes without en-suite accommodation
    • Inclusion of newer schemes with en-suite accommodation (including studio flats) at higher rental levels
    • Inclusion of new purpose-built accommodation
    • A mix of undergraduate & postgraduate students
    • A mix of domestic students & international students
    • A variety of occupational agreements, including University leases and direct lets
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