Growing asset class
Student blocks attract south east Asia funds
Mill House: student accommodation is becoming increasingly attractive to investors
Two blocks of student apartments have been acquired by Malaysia’s largest public services pension fund in a move reflecting the growing attractiveness of college accommodation as an asset class.
IP Investment Management (HK) and Glasgow-based Maven Capital Partners have sold the two newly-developed purpose-built blocks totalling 360 beds to Kumpulan Wang Persaraan (Diperbadankan) and 90 North Real Estate Partners. Terms were not disclosed.
The portfolio consists of The Mill House in Gorgie Road, Edinburgh, managed by Fresh Student Living,and 800 Bristol Road in Selly Oak, Birmingham.
This is KWAP’s first acquisition of a student housing portfolio in the UK and will provide a platform for further investment in the rapidly growing sector.
The Mill House, with 257 beds, was sold for £25.1m or £97,665 per bed which represented a net initial yield of 5.84%. 800 Bristol Road was sold for £14.6m or £141,900 per bed which represented a net initial yield of 5.69%.
Dato’ Wan Kamaruzaman Bin Wan Ahmad, chief executive of, KWAP, said: “I am excited by this exceptional opportunity to invest in the UK’s attractive student accommodation sector.
“The UK is a global leader in higher education, attracting students from Malaysia and around the world. Acquiring these assets from IPIM and Maven meets KWAP real estate investment objectives for targeting strategic, diversified portfolios in foreign markets with a focus on revenue generating portfolios.
“KWAP is pleased to be working with a UK-headquartered investment partner, 90 North, a company with a global reputation for its ethical investment approach.”
Andrew Whiteley, investment director at Maven, said: “We are delighted with the return on investment these high quality student properties have achieved for investors.
“The PBSA sector continues to offer excellent opportunities for institutional and overseas investors, such as KWAP and 90 North to acquire income generating assets and following the success of the first exits we have completed with IPIM, we look forward to continuing our relationship to identify new sites for development.”
Bidwells acted for the vendor while both Robert Irving Burns and MacLaren & Partners acted for the buyer.