Teesland plc and Insight Investment, acting on behalf of Clerical Medical, have established a new fund for investing in student accommodation, called the UK Prime Student Fund. Initial investors in the fund are Clerical Medical Investment Group and Equity Partnerships, Teesland´s fund and asset management division. The fund will ultimately hold £150m of student accommodation.
The fund has already bought two student accommodation schemes in Nottingham and Lincoln for £20m. The newly completed Nottingham development comprises 378 rooms and is located opposite the Law School at Nottingham Trent University. The Lincoln scheme was completed two years ago, is centrally located and provides beds for 294 students.
Student accommodation is a fast growing sector for property investment. Although the government intends to attract 50% of 18 year olds to university by 2010, there is already a shortage of quality student accommodation, and demand is expected to increase over the next few years.
Insight Investment’s Alan Tripp commented: “We consider this residential sub-sector to be beneficial to our aim of increasing Clerical Medical’s exposure to a broad range of residential assets. Insight, together with Teesland, will be looking to achieve as diversified an exposure as possible to this sector to complement Clerical Medical’s £2.5bn commercial property portfolio and this is likely to involve a broadening of the Limited Partnership’s equity base.”
Andrew Pratt of Teesland added: “The asset management and development expertise within Teesland will support the many investment opportunities offered by this new fund focused upon the student sector in the UK.”