Private equity firms are ramping up their investments in the U.K.’s student accommodation market, pumping hundreds of millions of pounds into a resilient sector with an eye on high rental returns in post-Brexit, post-Covid Britain. More than one-third of deals for student property in 2021 so far have been financed by private equity, compared to about 15% in total between 2016 and 2019, according to data compiled by real estate advisers Jones Lang Lasalle Inc.

With student application numbers projected to rise by 8.5% this year and purpose-built accommodation oversubscribed, property remains attractive for private equity firms. They are sitting on more than $300 billion for property investments alone and want to broaden their assets beyond offices, retail and hotels — all badly hit by Covid-19.

Major deals this year include Los Angeles-based Ares Management Corp.’s first U.K. student property investment. The $197 billion alternative asset manager spent 158 million pounds ($217 million) for two newly built housing units in February, and hopes to build a U.K. portfolio worth 400-500 million pounds, co-head of European real estate Wilson Lamont said in an interview.


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Source: BNN Bloomberg

By Benjamin Robertson and Olivia Konotey-Ahulu