Category: Market News

Transformational leader in student living – The Dot Group – has appointed Paddy Allen as the new Chief Executive Officer of Kinetic Capital, and Steve Grant – the current CEO of Kinetic Capital – as Chief Corporate Development Officer at The Dot Group.

“Steve and Paddy are exceptional executives with significant experience in the PBSA sector who will play key roles in Dot’s future success.”

Nicholas Porter, Chief Executive Officer, The Dot Group …

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Privately held investment firm Cain International has appointed Oliver Cummings as Managing Director, Head of PBSA, Europe. Oliver will lead the company’s PBSA equity strategy as the firm aims to build a portfolio of over 10,000 beds across Europe in the next five years.

Oliver will report to Arvi Luoma, who leads Cain’s European equity strategies. His team includes Matteo Busetti, Vice President, who has played a key role in Cain’s existing PBSA investments.

“Oliver’s appointment marks a crucial step in advancing our European equity strategy, specifically within the living sector. His expertise in PBSA across our target geographies will be vital as we aim to build a premium portfolio of 10,000 student beds within the next five years and further establish Cain’s presence in this growing asset class.”

Arvi Luoma, Cain International …

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Vertically integrated developer of student housing in the United States – Landmark Properties – has announced its expansion into the UK and Ireland. The news comes as the company celebrates its 20th anniversary.

The strategic move builds upon a near-decade of industry-leading development volume, including record-setting 2023 performance (delivering 25% of US off-campus student housing in 2023).

Landmark Properties is assembling a seasoned UK-based team spearheaded by the recent hiring of development professional Tom Banning as Director of UK & Ireland Development.

With the UK and Ireland offering attractive opportunities for student housing development, Landmark Properties is committed to developing high-quality student accommodation schemes to the UK market, leveraging its expertise to help offset the implications of the nation-wide supply and demand imbalance and creating strong yields for its partners …

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Strong demand and rental growth underpinning property values

Unite Students, the UK’s leading owner, manager and developer of student accommodation, today announces an update on current trading and quarterly property valuations for the Unite UK Student Accommodation Fund (‘USAF’) and the London Student Accommodation Joint Venture (‘LSAV’) as at 31 March 2024.

Highlights

• Continued strong demand with 86% of beds sold for the 2024/25 academic year (2023/24: 90%)
• Confident in delivering rental growth of at least 6% for the 2024/25 academic year
• Planning approvals for 1,450 new beds in London and Bristol
• Property values stable in Q1 (USAF: (0.5%), LSAV 0.8%) with rental growth offsetting the loss of Multiple Dwellings Relief …

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Private student accommodation operator The Kexgill Group, trading as the University Quarter® in the UK and Kexgill Immobilien in Germany, has announced that it has seen a 9% increase in Gross Asset Value and 11.5% in Net Asset Value in its latest financial year.

The University Quarter® operates in nine university locations including Liverpool, Newcastle and Nottingham. Kexgill Immobilien has multi-family blocks throughout North Rhine-Westphalia in Germany …

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Ethical property developer in the Northwest – Integritas Property Group (IPG) – has announced its partnership with Homes for Students for its latest development, Deakin’s Yard in Newcastle-Under-Lyme.

The partnership will bring together the expertise of IPG in developing student accommodation and the knowledge and experience of Homes for Students in managing and operating student homes. Once known as the Sky Building, Deakin’s Yard is ideally located, with immediate access to Keele University. It is also only a short distance away from Staffordshire University and Royal Stoke University Hospital …

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Beachrock has been appointed to sell a £90m portfolio of purpose built student accommodation (PBSA), comprising 1,494 student bed spaces.

The seven assets are located in four university cities with each bed worth £60k.

Four Coventry sites of Corporation Village, Burges House, Pillar Box and Market Way are up for sale as well as Clarendon Street in Nottingham, which when combined totals more than 800 beds …

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HIGHLIGHTS

Full occupancy in 2023/24, strong demand for 2024/25

·    99.8% occupancy and 7.4% rental growth for the 2023/24 academic year (2022/23: 99.3% and 3.5%)

·      Strong reservations for 2024/25 80% (2023/24: 83%)

·      44.3p adjusted EPS in 2023, +8% YoY (2022: 40.9p)

Sustained earnings growth from our best-in-class platform

·      Confident in delivering rental growth of at least 6% for 2024/25 (previously at least 5%)

·      Guidance for 3-5% growth in adjusted EPS in 2024 to 45.5-46.5p

·      Targeting 10-12% Total Accounting Return (TAR) in 2024, before yield movement

·      Earnings growth to accelerate from 2026 as development completions increase

·      £26 million technology upgrade to enhance customer experience and EBIT margins from 2025

Housing supply unable to meet student demand

·      Significant need for high-quality, affordable student homes

·   New PBSA supply 60% below pre-pandemic levels and over 100,000 reduction in HMO beds available

Investment activity aligned to the strongest universities

·      Delivery of £60 million Morriss House development in Nottingham at 8.5% yield on cost

·      Rental portfolio enhanced through £24 million of refurbishments at a 9% yield on cost

·      £197 million of disposals held for sale to improve portfolio quality (Unite share: £79 million)

Record £1.3 billion development pipeline in the strongest markets

·      £569 million committed pipeline in Russell Group cities at 6.5% yield on cost

·      £250 million joint venture agreed with Newcastle University announced in February

·      Future development pipeline of £452 million at 6.7% yield on cost in cities with tightest supply

·      New London scheme added to future pipeline for delivery in 2028

·      Targeting £50-75 million p.a. of refurbishment projects at 8%+ yield on cost

Strong balance sheet underpinned by resilient valuations

·   £5,510 million portfolio valuation (Unite share), up 1.2% on a like-for-like basis (2022: £5,397 million)

·      7.4% rental growth offsetting 31bps yield expansion

·      TAR of 2.9% (2022: 8.1%), reflecting 1% reduction in NTA to 920p (2022: 927p)

·      Continued investment in fire safety, resulting in 9p of new commitments net of claims

·      Net debt: EBITDA reduced to 6.1x (2022: 7.3x), with LTV of 28% (2022: 31%)

Delivering on sustainability targets

·      Significant improvement in EPC ratings, over 99% of portfolio now A-C rated (2022: 80%)

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PBSA operator – Nido – partners with multi-award-winning ESG technology solutions provider – Utopi – to reduce the carbon footprint of its PBSA assets in the operator’s European portfolio, starting with Ireland and Denmark. The operator’s deployment of this technology is being delivered by managed service provider, ASK4.

Using Utopi’s multisensors and data insights platform, Nido can efficiently track the carbon impact of its PBSA assets, starting with Nido Bryggen in Denmark, Nido Ashlin House and Nido Curraheen Point in Ireland.

Through being able to measure and contextualise the energy consumption within each building, and by engaging with residents, Utopi estimates that Nido could reduce energy use and the carbon impact of the buildings by up to 20% over a three-year period …

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Partners Group, the Swiss-based global private markets firm, and DeA Capital Real Estate have formed a JV with Camplus, an operator and the leader in student housing in Italy.

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