Private equity firm KKR has sold two student housing developments in Netherlands for €190m to global housing fund manager Greystar Real Estate Partners and Belgian company Xior Student Housing.

Greystar bought a 680-unit complex in Utrecht, and Xior acquired Zernike Tower, which houses about 700 units in Groningen, according to KKR.

Greystar said it paid €98.5m for the asset in an off-market transaction, and Xior said it invested €91.5m.

KKR has been developing student housing in the Netherlands since 2018, through a joint venture with Round Hill Capital, as part of plans to capitalise on growing demand for high quality affordable accommodation for students and young professionals across Europe

The 23-storey Zernike Tower in Groningen recently opened in August this year and achieved full occupancy shortly thereafter, with 698 fully furnished independent studios. It is located close to the city centre and the Zernike student campus of Groningen, one of the top 4 student cities in the Netherlands.

The complex in Utrecht comprises 682 units split between a newly constructed 24-storey building and a refurbished former hospital wing with nine storeys that were completed in October 2020, located in close proximity to Utrecht University and the city centre.

The double sale follows a similar disposal in May when KKR sold residential buildings to GIC and Orange Capital Partners.

KKR said it would continue to assess further investment opportunities in the Netherlands, including acquiring existing assets, developing new purpose-built student accommodation, forward funding and repositioning assets across select university towns and cities across Europe.

Seb D’Avanzo, managing director for European real estate at KKR, said: “With these investments, we have helped address the growing demand for quality and well-located affordable accommodation in the Netherlands that also contribute to the local community and economy.

“We see the Netherlands as an important real estate market and will continue to look for opportunities to invest in delivering quality assets to benefit from the continued pipeline of demand.”

Greystar said it would focus on leasing up the remaining units in the Utrecht complex, which are situated mainly in the newly refurbished hospital building, and will introduce its global operating platform to the site.

Mark Kuijpers, managing director for the Netherlands at Greystar, said: “The asset is a very good example of next-generation student housing, which fits our operational vision, and sits squarely within one of our target markets for expansion.

“The student population in Utrecht, which consists primarily of Dutch nationals, has increased by 40% over the last 15 years and there is currently a quantitative shortfall of around 5,500 units to meet demand, as well as a lack of new development on the horizon.

“The qualitative shortfall is even bigger. These compelling market fundamentals combined with the location, quality of the product and projected returns means that this was a highly desirable transaction that sits comfortably within our strategy.”

Xior said the acquisition of Zernike Tower would become its third asset in Groningen and would increase the size of its Dutch portfolio to about €1bn.

Christian Teunissen, CEO of Xior, said: “We are extremely proud to acquire this top-notch, brand new operational tower, thereby gaining a firmer foothold in the heart of one of the most important student cities in the Netherlands, which is characterised by an acute shortage of qualitative student housing.”

Source: Real Assets

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