Monday, December 6, 2021

DFI buying student housing in £35.6m forward funding deal

student housing

The investment is DFI’s second UK PBSA acquisition, following the 2017 purchase of Canterbury Student Manor

Deutsche Finance International (DFI) is buying a UK student housing asset in a £35.6m (€41m) forward funding deal.

DFI, investing on behalf of its pan-European value-add fund, is buying the 462-bed purpose-built student accommodation (PBSA) opportunity in Leicester from Watkin Jones.

Watkin Jones is developing the Leicester property, which is scheduled to complete in time for the 2021/22 academic year.

The investment is DFI’s second UK PBSA acquisition, following the 2017 purchase of Canterbury Student Manor. The €2.7bn pan-European private equity real estate investor has also assembled, through both acquisitions and development, a 1,100 unit student accommodation platform in Denmark.

Paul Nearchou, investment director at DFI, said: This off-market transaction represents a compelling opportunity for us to build on our UK student accommodation exposure and take advantage of the current market dislocation with the acquisition of one of the few newly constructed PBSA assets in Leicester.

The outlook for the UK student sector remains strong, with supportive demographics and growing domestic and international demand, he said.

Gavin Neilan, co-founder and co-managing partner at DFI, said: In line with our platform focus on delivering high quality operational real estate with the customer at its centre, we have been invested in the student accommodation sector since 2017 and have continued to increase our exposure in the UK and Europe.

Neilan said its countercyclical nature has proven defensive against market challenges, while the success of UK’s vaccination programme will hopefully see relative normality return in time for the opening of this asset. The UK remains one of our conviction calls, with its status as a world-renowned centre of higher education continuing to attract students from all over the world.


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