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Deutsche Finance International (“DFI”), the pan-European private equity real estate investor which manages over €2.7 billion of assets and specialises in customer-centric real estate, has agreed to the forward purchase of a 462 bed purpose built student accommodation (“PBSA”) opportunity in Leicester, United Kingdom. The development will be acquired from Watkin Jones plc, one of UK’s leading student accommodation developers, in an off-market transaction for £35.6 million on behalf of DFI’s pan-European Value Add Fund.
The investment is DFI’s second UK PBSA acquisition, following the 2017 purchase of Canterbury Student Manor, a 386 bed student accommodation asset in Canterbury. DFI has also assembled, through both acquisitions and development, a 1,100 unit student accommodation platform in Denmark.
DFI’s latest investment is underpinned by strong UK student market fundamentals characterised by increasing demand for higher education (fuelled by rising domestic and international demand); supportive UK demographics; and rising enrolment figures in the near term, driven by Covid-19 and the associated employment market challenges. Furthermore, Leicester is an attractive PBSA investment market with the student population having grown substantially over the last decade to more than 40,000 students, primarily led by growth at the city’s De Montfort University. Despite this growth, supply remains constrained with a lack of modern PBSA stock and a limited development pipeline.
Watkin Jones is developing the Leicester property, which is scheduled to complete in time for the 2021/22 academic year and will provide a high quality mixture of four to seven bed clusters and studios of different sizes. Taking into account design learnings from the pandemic, around 3,875 sq ft will be dedicated to modern and spacious amenities including communal areas, study and meeting rooms, virtual gym space, a games room and a landscaped courtyard. The asset is a short walk to Leicester city centre and De Montfort University.
Source : DFI