Greystar Acquires London Student Housing Portfolio

By Jeffrey Steele, Contributing Writer

Charleston, S.C.–Greystar has purchased a portfolio of student housing properties in the United Kingdom. The portfolio consists of three properties in central London that encompass a total of 1,129 beds. The properties are Woodland Court, Wedgwood Court and Great Suffolk Street.

The Charleston, S.C.-based company is the United States’ largest operator of apartment communities, managing more than 215,000 apartments. It was also the largest private acquirer of apartments globally in 2013. A fully integrated real estate company offering expertise in multifamily investment management, development and property management, Greystar maintains as its specialty conventional apartment communities and student housing.

The company operates primarily in the United States. In addition to operating outside U.S. borders in the U.K., Greystar recently launched an expansion into Mexico.

The acquisition follows on the heels of the October 2013 purchase of 21 properties, encompassing more than 6,900 beds, located throughout London and the U.K. Greystar acquired these properties from the administration of Opal.

The company has stated its intention to establish itself as a primary participant in the U.K. student and private rented sectors.

“The U.K. student housing sector is relatively nascent and is less mature than [that of] the U.S., but has higher demand growth rates, particularly from international students,” Greystar senior managing director Mark Hafner tells MHN. “Yet despite the robust demand, there is a void of high quality product to fill that demand. From a capital markets perspective, Europe is a couple of years behind the U.S. in its recovery from the financial crisis, providing an attractive entry point to invest in the U.K. early in the cycle. We plan to acquire additional properties in London and are also exploring development opportunities to construct new multifamily rental housing and purpose-built student housing.”

The market in the U.K. is not as transparent as Greystar is accustomed to in the United States, he adds.

That is particularly true for rental housing, which Hafner says is “a relatively nascent asset class in the U.K. It’s very difficult to obtain accurate data and reliable information in the U.K. The information asymmetry in the market poses challenges but also creates outsized opportunities, since the market is not as efficient as the U.S. multifamily sector.”

Greystar took over management of the assets when it closed on the acquisition. Its goal, Hafner says, is to provide the same standard of customer service to its U.K. residents as it provides in the United States.

“In order to do so, we’ve invested heavily over the past year in building our U.K. team and management platform,” Hafner says. “We’ve found there are some cultural differences in what students desire versus the U.S., but there are a whole lot more similarities. The demand for exceptional product and superb customer service is universal.”