SPH Expands UK Student Housing Portfolio

The Singapore-based firm, through three wholly-owned subsidiaries, added more than 1,200 beds across three properties in Southampton, Sheffield and Leeds for about $174 million.
Asa Briggs House, Leeds. Image courtesy ofSingapore Press Holdings Ltd.

Singapore Press Holdings Ltd. has expanded its student housing holdings in the U.K. with the acquisition of a portfolio spanning three cities with a total capacity of 1,243 beds for approximately $173.6 million. The transactions were made between SPH’s wholly-owned subsidiaries, Straits Five Pte. Ltd., Straits Six Pte. Ltd., and Straights Eight Pte. Ltd., and Habitus Holdings, Privilege Holdings, Privilege Southampton Holdings and AIGGRE Europe Real Estate Fund I GP.

SPH did not break out which assets were purchased from each firm, but the properties acquired are:

  • Hampton Square, located at 2 Mayfield Road in Southampton; the property has 526 beds and is 90 percent occupied;
  • Sharman Court, located on Broad Lane in Sheffield; the asset offers 397 beds and is 96 percent occupied;
  • Asa Briggs House, located at 6 St. John’s Road in Leeds; the property has 320 beds and is fully occupied.

Southampton, Sheffield and Leeds have sizable full-time student populations and the portfolio has rent guarantees for the 2018-2019 and 2019-2020 academic years.

SPH recently added 380 beds in Lincoln and Glasgow which now gives the firm a student housing portfolio with more than 5,000 beds across 20 assets in 10 U.K. cities. With assets under management now surpassing $600 million, SPH is considered a leading player in the U.K.’s Purpose-Built Student Accommodation sector. The firm is also operating in Birmingham, Bristol, Huddersfield, London, and Plymouth.

“Since our first PBSA investment in September 2018, we have now successfully completed four acquisitions in the U.K. These acquisitions are high quality, cash-yielding assets in key student cities in the U.K. and will enhance our recurring income going forward. We remain disciplined in our acquisition pipeline, to build our U.K. PBSA platform to a platform of scale,” Ng Yat Chung, SPH CEO, said in a prepared statement.

With a larger platform, SPH has established a new brand called Capitol Students to operate the platform and has a team of five on the ground in the U.K. and eight in Singapore overseeing the portfolio along with more than 100 employees managing the assets.

The firm has expanded its sales and marketing capabilities and is developing a community portal for the 2019-2020 academic year for students, parents and the institutions.

Citing a recent Knight Frank report on the PBSA sector, SPH noted the U.K.’s world-class higher education system is expected to grow with rising demand from both local and international students. The Knight Frank report stated overall rents had risen 2.26 percent for the 2018-2019 academic year. It was down slightly from a 2.55 percent boost the previous school year due to increased development in the market.

Hot Investment Opportunities

The student housing sector has seen increased investment activity in recent months, including another portfolio transaction by a Singapore-based firm. In March, Far East Orchard acquired a three-property student housing portfolio totaling 622 beds Liverpool and Bristol in a deal valued at $72.3 million. That deal expanded Far East Orchard’s presence in the U.K. to nearly 2,100 beds in eight properties.

Also in March, a joint venture between Europa Capital and Generation Student raised $132 million for its Europa Generation student housing fund for a total capital raise of $396 million. The two-year-old fund recently closed on its first deal, acquiring 1,561 beds in Bath, Newcastle, Sheffield, Aberdeen and Bournemouth, and expects to add 144 beds in Oxford during the summer.

The student housing sector is also hot elsewhere in Europe. Earlier this month, a joint venture between Global Student Accommodation Group and Harrison Street agreed to acquire more than 10,000 student housing beds across Spain, with plans to invest more than $845 million in university cities across the country. The JV, which already has 2,000 beds in Spain, will 8,000 new beds in Madrid and Barcelona. The partners have already made acquisitions in the UK and Ireland and plan to grow their student housing portfolio in other European university cities.