U.S. real estate investment firm CA Ventures has made its first foray into the European market by investing a planned £500 million ($625 million) per year to develop purpose-built student accommodation in the UK and Ireland by 2021. The Chicago-based company, which has delivered some 50,000 beds in North America, also plans to commit £300 million ($375 million) per year to developments in the Netherlands, Spain, Portugal and Italy.
As part of the deal, CA Ventures has announced three new projects in the UK totaling 888 beds which are expected to be ready for the 2021/22 academic year. Backed by capital partners PGIM Real Estate through its European value-add debt platform and senior debt through Investec, the developments include state-of-the-art student housing facilities in Sheffield, England and the Scottish cities of Glasgow and Edinburgh:
- Sheffield: 250-bed community at Dart Square adjacent to the University of Sheffield and within walking distance of Sheffield Hallam University
- Glasgow: 422-bed property at 366 Cathedral St., next to the University of Strathclyde and within walking distance of Glasgow Caledonian University and the University of Glasgow
- Edinburgh: 216-bed facility on Dundee Street accessible to Edinburgh Napier University and the University of Edinburgh
CA Ventures also disclosed that its immediate pipeline includes 257 beds in Dublin, Ireland; 251 beds in Belfast, Northern Island; and further projects in Bristol, York and Edinburgh which are all slated for delivery in time for the 2021/2022 academic year.
Edinburgh-based KR Developments has announced a partnership with CA Ventures to develop the projects in Glasgow, Sheffield and Edinburgh.
Tapping demand for student beds
The strategy is intended to tap into a market that CA Ventures views as severely undersupplied. Full-time students outnumber available beds in the UK by three to one, according to a Knight Frank report that surveys the global student property market. The property brokerage projects that full-time undergraduate numbers will rise by 15 percent between 2019 and 2030, an increase of 222,000 to more than 1.7 million students.
International students form a key constituency in this market. The British government earlier this year launched an International Education Strategy aimed at boosting the number of students from abroad by 30 percent. The strategy proposes extending residency rights after graduation to two years from the current four months.
CA Ventures launched CA Management Services last year to oversee the firm’s portfolio of student housing communities in the U.S., South America and Europe, tapping former Executive Vice President Beth Pinder to lead the new entity. The move came after CA Ventures hired Carlo Matta to head the company’s European division.