CBRE Global Investment Partners sells 75% of student accommodation portfolio, launches second U.K. student fund

CBRE Global Investment Partners has completed the sale of approximately 75 percent of the Curlew Student Trust portfolio, comprising purpose-built student accommodation throughout the United Kingdom.

The 15 student accommodation assets (5,407 beds) in the sale portfolio are located in 12 strong university cities across the United Kingdom, including London, Birmingham, Bath, Durham and Sheffield. The sale also includes land in Swansea that is consented for the development of student accommodation.

Curlew Student Trust (CST) was launched in 2013 as a seven-year fund, with three seed assets, backed by clients of CBRE Global Investment Partners and managed by Curlew Alternative Asset Management. The fund’s strategy to acquire and forward fund high-quality purpose-built student accommodation has been successful with CST seeing significant growth, expanding to 20 assets (6,254 beds) with a further five assets (1,014 beds) due to be completed for the start of the 2018–2019 academic year. Given the strong performance of the fund and the fulfillment of its objectives to date, a decision to sell approximately 75 percent of the portfolio was taken.

CST is retaining approximately 25 percent of its total portfolio and this will continue to be managed by Curlew. Furthermore, following the success of CST, CBRE Global Investment Partners and Curlew have launched a second venture in the U.K. student accommodation sector, Curlew Student Trust 2 (CST 2). CST 2 will follow a similar strategy to its predecessor fund and already has two seed assets (917 beds) under offer for delivery in 2020.  The follow-on fund also has an active pipeline of opportunities.

There are huge opportunities for investors who can successfully navigate local markets to deliver new student housing, said Savills in its 2017-2018 World Student Housing report.

Just under 2.3 billion students are enrolled in higher education in the United Kingdom, most of which are studying full-time first degrees. Although this figure is below the 2010–2011 peak of 2.5 billion, the proportion of international students has grown by 5 percent over the past decade.

Approximately half of full-time students live in the private rented sector, and a fifth in university-owned PBSA. The U.K. accommodation sector is fragmented with the top 10 providers currently owning around 30 percent of supply. Approximately 37,200 student-housing units are under construction, with a further 91,400 units to be delivered over next five years as of October 2017.

U.K. purpose-built student housing is highly attractive to international investment. Singapore was the largest source of investment in 2016 (£1.2 billion for more than 13,000 beds) with North America second.

Investors are willing to pay premiums for larger portfolios, driven by their need to allocate their investment capital and build scale quickly.