An opportunity fund advised by pan-European real estate investment manager Tristan Capital Partners has invested €494.4m (£439m) in a new UK student housing joint venture that it has formed with the Liverpool-based developer-operator Downing.
European Property Investors Special Opportunities IV (EPISO 4) has acquired a 90% interest in the joint venture, which owns a 2,756-bed portfolio of six halls in some of the most prestigious university cities across the UK. It has committed to forward purchase two more residences next year, including a prime 32 storey, 578 bed scheme in the heart of Vauxhall London, taking the total number of beds to 3,644.
Peter Mather, Managing Director of Investments at Tristan Capital, said: “This joint venture allows us to access a best-in-class, newly purpose-built student accommodation portfolio, in leading university cities. Having an experienced operating partner is critical for investing successfully in this niche sector and Downing offers a wealth of experience, unrivalled industry relationships and a proven track record as a first class developer and operator.”
Downing will retain a 10% stake in the joint venture, which will acquire the eight assets in two tranches. Downing developed all six of the existing halls in the past two years and will deliver the two developments in Glasgow and London. The management team at its Downing Students affiliate has more than 30 years of operational experience in student accommodation and has a track record of achieving strong occupancy rates.
Simon Garnett, Finance Director of Downing, said: “We are delighted to have completed this agreement with Tristan and look forward to working with them on this portfolio. This partnership further establishes Downing as a major player in the student accommodation sector. Our market-leading portfolio and existing immediate pipeline of developments gives us a strong presence across the UK’s leading universities cities."