KKR and Round Hill Capital are forward funding the development of four purpose-built student accommodation (PBSA) schemes across the UK. As part of the transaction, the JV has exchanged an option agreement to forward-fund a 348-bed PBSA scheme in Bristol conditional on full planning consent. The four PBSA development schemes are being acquired from and built by Watkin Jones and will provide a combined total of 1,815 beds. The deal marks the JV's first UK transaction.
The assets are strategically located in four key university cities throughout the UK with strong and increasing demand for high quality, well-located student housing. These high specification schemes will be configured predominately in cluster flats with some studios and comprise dedicated common areas and amenities for all residents to enjoy:
- Coventry: 778 beds across 17 storeys on Whitefriars Lane, adjacent to the Coventry University campus and in close proximity to the city centre. To be complete in time for the 2020/21 academic year.
- Glasgow: 401-beds across eight storeys on Kyle Street very close to the city centre and Glasgow Caledonian University and the University of Strathclyde. To be complete in time for the 2019/20 academic year.
- London (two schemes): 353 beds across nine and 17 storeys on Forest Road, Walthamstow adjacent to the Blackhorse Road Underground and Overground station. 283 beds across 17 storeys on Albion Way, a few minutes’ walk to Wembley Park Underground. Both have excellent transport links to higher education establishments, retail and cultural amenities across London. Both to be complete in time for the 2020/21 academic year.
The buildings will be managed by Nido Student. The financing was secured from Wells Fargo.
Commenting on the acquisition, Michael Bickford, founder and CEO of Round Hill Capital, said: “Round Hill has a long-established track record of successfully investing and developing as well as asset managing student and wider residential real estate in Europe, and currently operates circa 65,000 accommodation beds in eight European countries. We are also funding a pipeline of over 9,800 student accommodation beds across the UK, Ireland, the Netherlands, Portugal and Spain. This is our joint ventures’ first student housing development scheme in the UK, where select areas of the UK student housing market still suffer from structural supply constraints in key university cities. Taken together with the sector’s growing demand for high specification and well-located PBSA and our proven Nido brand and operating expertise, we are continuing to expand further in line with our existing growth strategy in the UK and wider Europe, helping to alleviate housing pressures.”
Seb d’Avanzo, Director at KKR, commented: “We are delighted to have completed our first investment in the UK student housing sector, a market where the fundamentals and future growth drivers remain strong. These are high-quality developments in excellent locations. KKR’s European real estate platform has a successful track record in executing partnership deals, and we look forward to working closely with Round Hill to expand further our footprint in student accommodation in select European markets.”
Brian Welsh, Chief Executive of Nido, commented: “We are pleased to acquire this fantastic UK student housing portfolio as we continue to further grow our strong pipeline of attractive potential investments in the UK and across wider Europe. We are accelerating our expansion and look forward to making Round Hill one of the largest global developers and operators of student accommodation, supported by Nido Student, our well-established student management platform. Following significant recent research and analysis of today’s student, our Nido Student brand and offering has evolved to reflect the needs and ambitions of today’s students so that we are delivering a more complete and inspirational student experience across a wider variety of room types and rates to suit a broader spectrum of budgets and tastes.”
