U.K.-based student housing provider Collegiate AC is seeking to raise up to £2 billion ($2.6 billion) of strategic investment to expand the company’s portfolio to new and existing territories across Europe. The announcement comes as the company sees unprecedented demand for its high-quality student accommodation and sets ambitious growth targets for the next five to seven years.
Collegiate is a proven operator in developing and managing student accommodation, having successfully delivered more than 20,000 units since 2011. The company currently manages more than 20 developments across the United Kingdom, Spain and Portugal with properties typically between €35 million to €100 million ($39 million to $112 million) in gross development value. In total, they currently manage assets to a value of nearly £2 billion ($2.6 billion)
As part of Collegiate’s ambitious growth strategy the company is also actively seeking acquisition opportunities of standing and cash generating assets. The size of the opportunity is highlighted in a report from Savills that suggests approximately 50,000 purpose-built student accommodation beds were traded in 2018, with a total value of £5.25 billion ($6.87 billion).
Collegiate’s expansion announcement comes after research highlights an unprecedented demand for student housing across Europe. Figures from UNESCO suggest there is an increasingly internationally mobile student base with as many as 5 million internationally mobile students worldwide, with the figure expected to grow to 7 million by 2020. Asia Pacific remains the top region from which international students originate, while Europe and North America are the most popular destinations with more than 42 percent of internationally mobile students heading to Europe.
Research highlights that students are attracted by high-quality universities, the opportunity to learn a language and the prospect for post-study knowledge-based employment. Quality accommodation is also an increasingly important factor for students when choosing a university.
Since 2017, 50 percent of investment in European student housing has come from cross-border sources, illustrating the global nature of the market. Collegiate AC says it is well placed to operate internationally with a presence in the United Kingdom, Spain, Portugal and Italy and a pan-European team comprising architects, planning consultants, lawyers and financiers as well as developers and asset managers.
“We’re experiencing an unprecedented demand for high-quality student accommodation across Europe and are now actively seeking strategic investment partners to capitalize on this by extending our high-performing portfolio. We have opportunities for a wide range of investors from across the risk spectrum looking for exposure to the PBSA market,” said Eri Cuanalo, CEO, Collegiate AC.
Since 2014, investment volumes in Northern European markets, including Germany, the Netherlands and Denmark, have more than doubled. Much of this growth has been driven by domestic capital, although recently Spain, Italy and the Netherlands have attracted increasing volumes of foreign capital.
Cuanalo continued, “We’re well placed to maximize the opportunities presented as we already boast some of the finest student properties around the United Kingdom and Europe, as well as an international team that is able to deliver on the ground. We are excited by the potential to expand our portfolio to new locations and bring returns to our strategic partners.”
There are several routes open to investors looking for exposure to student housing, varying between passive and actively involved. Investors can pick their strategy depending on their appetite for operating risk and the type of investment mechanism suited for their markets whether they would like to be involved in the development of new projects through to wanting to invest in completed assets.
Collegiate has managed more than 50 student housing properties, helped to design and build more than 20,000 units over the past eight years and is an internationally recognized student brand that has housed tens of thousands of students from around the world. Collegiate AC is headquartered in Oxford, England, and has a major office in Madrid.
