Investor consortium targets UK student accommodation sector

George Sell George Sell Uploaded 27 August 2020

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UK: VELO Fund, a global consortium of global investors, has announced plans to enter the UK purpose-built student accommodation (PBSA) sector.

The fund, which represents a syndicate of high-net-worth individuals, is reportedly looking to spend £150 million on PBSA assets in the next year.

The fund’s first purchase will be the 90-bed St Augustine’s House scheme in, which it is acquiring from NCH Capital for £3.75 million, reflecting an 8.19% net initial yield. The deal is expected to close on October 1st.

The portfolio and platform will operate under the name VELO Student Living.

“Despite economic uncertainty, UK higher education remains globally attractive,” said Rupert Strutt, an associate in Knight Frank’s student property team, which advised NCH Capital on the deal. “Investors are recognising this with continued capital inflow into the sector.”

VELO Student Living founder Bilal Ahmed added: “At a time of social and economic turmoil, students turn to higher education. VELO Fund believes PBSA is a resilient asset class and will continue to outperform despite the turbulent economic times. This deal marks the first in a series of acquisitions we aim to make in the student sector over the next 12 months.”

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