Curlew Capital is considering an £800m sale of its CBRE Global Investment Partners-backed UK student accommodation venture.
Curlew Student Trust owns around 30 assets totalling 9,000 beds. The investor and asset manager has held discussions with advisers over a disposal, although no formal instruction has been made yet.
A successful sale would result in the second largest deal in the UK student sector, behind CPPIB’s £1.1bn purchase of Liberty Living from the Brandeaux Student Accommodation Fund in 2015.
Curlew, which is led by former Teesland chief executive and Valad Europe director Paul Oliver, established CST only three years ago and has quickly built up a large portfolio.
It is looking to take advantage of the misalignment of demand and supply in the student housing investment market and provide a quick return to the CBRE GIP in-house funds and global clients that backed it.
It has built its portfolio by forward-funding developments including a 412-bed block on Liverpool’s Lime Street (pictured above), which is under construction. All of the assets are recently completed or under development and the portfolio is considered of high quality.
The properties are located in university towns and cities including Bristol, Birmingham, Liverpool, Manchester and London.
2017 student deals
Union State portfolio
- Size 6,500 beds
- Price £460m
- Buyer CPPIB
- Seller Blackstone
Unite portfolio
- Size 4,185 beds
- Price £296m
- Buyer Brookfield
- Seller Unite
Aston Student Village
- Size 3,067 beds
- Price £227m
- Buyer Unite Students and GIC
- Seller Aston Student Villages
The portfolio is branded as and operated by Fresh Student Living, owned by Watkin Jones Group, which itself developed much of the portfolio. Fresh would not be part of any sale.
According to CBRE, total student accommodation transactions in the UK so far this year total £1.6bn and volumes are expected to exceed last year’s figure of £3.5bn.
Brookfield, CPPIB and GSA are all targeting aggressive growth in student housing as investors look to diversify into alternative sectors.
Large-scale portfolios of this size offer investors the opportunity to build scale quickly, which is essential to create additional, operational value as it facilitates the opportunity to establish a recognised brand.
Investors with established products could look to rebrand the assets and disinstruct Fresh as operator.
Curlew continues to have a long-term strategy to invest in student accommodation and other alternative sectors. In an interview with EG last October, CBRE Global Investors’ head of EMEA, Jeremy Plummer, said he expected student accommodation to be one of its areas of focus for investing alongside residential, fortress malls, logistics and “tactical” offices.
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