SINGAPORE: Far East Orchard Limited has acquired a portfolio of three freehold student accommodation properties located in Liverpool and Bristol, United Kingdom (UK) for £ 55.0 million.
Far East Orchard now has a portfolio of 2,091 purpose-built student accommodation (PBSA) beds across eight properties in the UK, a media release said.
The newly acquired properties are the 133-bed Harbour Court and 166-bed St Lawrence House in Bristol, and The Glassworks in Liverpool with 323 beds. All three properties enjoy strong occupancy due to favourable supply-demand dynamics and their proximity to university campuses and the city centre.
The properties will be managed by the facility manager of the Group’s existing student accommodation portfolio in Newcastle upon Tyne, UK.
Bristol is a strong regional city for PBSA, with two major universities and a sizeable full-time student population. It was identified by Savills as a first-class location for student accommodation development. Liverpool is one of the largest university cities in the UK and home to four higher education institutions.
Group Chief Executive Officer and Managing Director of Far East Orchard, Lui Chong Chee said, “Since our entry into the UK student accommodation sector in 2015 via the acquisition of a portfolio of properties and land sites for development in Newcastle upon Tyne, we have expanded into three other cities – Brighton, Bristol and Liverpool. Our latest acquisition of three stabilised properties in established UK university cities is part of our strategy to enlarge our recurring income base, thereby reinforcing the Group’s resilience.”
The student accommodation asset class in the UK has counter-cyclical qualities and a track record of strong occupancy and rental growth. Despite Brexit, demand for purpose-built student accommodation (PBSA) in the UK is expected to remain strong given the established reputation of the UK higher education system and a healthy student-to-bed ratio.
“We are confident of the long-term fundamentals of the UK student accommodation market and remain on the lookout for opportunities to grow our student accommodation portfolio. In line with our strategy to grow our recurring income base, we remain on target to grow our student accommodation portfolio to 3,000 beds by 2023,” added Lui.
In Brighton, the Group is developing Hollingbury House, a 193-bed student accommodation property, scheduled for completion in 2019. The completion of Hollingbury House will further scale up the Group’s PBSA portfolio in the UK from approximately 2,100 beds to close to 2,300 beds by the end of this year.