DWS Makes $77M UK Student Housing Investment

Bristol, England student housing property. Image courtesy of Cushman & Wakefield

Global asset manager DWS has acquired a 357-bed student housing property in the city center of Bristol, England, from F3GROUP for approximately $77 million (£57 million) through one of its German real estate funds. The asset is under construction and slated to deliver in the third quarter ahead of the 2021-2022 academic year.

Located in the Redcliffe area of Bristol city center, the property is leased to the University of Bristol on a long-term basis. The property is designed by award-winning architects GSS and will have more than 92,000 square feet in total floor space. Amenities will include a gym, study space, bike parking, communal lounge and theater room.

Cushman & Wakefield served as an advisor to DWS. Nick Allan, international partner, Capital Markets, for Cushman & Wakefield, said in a prepared statement the development of the property aligns with the University of Bristol’s business plan to develop high-caliber courses around major growth sectors of the global economy. Allan said the university’s 15-year lease and the challenges to develop new student housing in central Bristol made the transaction a compelling investment acquisition for DWS.

Mike Hill, head of real estate transactions, UK and Ireland, at DWS, said in prepared remarks Bristol is a thriving city and one of the best student markets in the UK. 

Calling the sale a strategic exit for F3GROUP, CEO Gavin Gleave noted that despite tough economic conditions there is still strong demand from market-leading investors for long-term income assets.

UK Student Housing

One year ago, private equity giant Blackstone expanded its presence in European student housing by agreeing to acquire the UK’s iQ Student Accommodation from Goldman Sachs and Wellcome Trust for $6 billion ((£4.7 billion). When it closed in May, the transaction was said to be the largest private real estate deal in British history. It gave Blackstone control of one of the leading providers of purpose-built student housing in the UK—the second biggest market for the asset class outside of North America.

In September 2019, U.S. real estate investment firm CA Ventures announced it planned to invest up to $625 million a year in developing purpose-built student housing in the UK and Ireland. The firm also stated it was planning up to $375 million per year to develop properties in the Netherlands, Spain, Portugal and Italy. Nearly a year later in August 2020, CA launched a new property management platform to operate its growing student housing platform in Europe. Called Novel Student, the platform began by managing three communities in the UK—one in Sheffield, England, and two in Scotland.