CoStar – Malaysia’s KWAP teams up with 90 North for drive into UK student homes

Press releases

Malaysian fund Kumpulan Wang Persaraan (KWAP) has teamed up with 90 North Real Estate Partners to build a platform in the UK student housing market with the initial acquisition of a portfolio from IP Investment Management and Maven Capital Partners for £39.8m.

The portfolio of two newly developed purpose-built student accommodation assets totals 360 beds.
The Mill House in Edinburgh and 800 Bristol Road in Selly Oak, Birmingham are both fully operational and will offer a day one running yield.

It is KWAP’s first acquisition of a student housing portfolio in the UK and will it said provide a “platform for further investment in the rapidly growing sector”.

The Mill House was sold for £25.1m or £97.8k per bed which represented a net initial yield of 5.84%. 800 Bristol Road was sold for £14.6m or £141.9k per bed which represented a net initial yield of 5.69%.

Dato’ Wan Kamaruzaman Bin Wan Ahmad, Chief Executive Officer, KWAP, said: “I am excited by this exceptional opportunity to invest in the UK’s attractive student accommodation sector. The UK is a global leader in higher education, attracting students from Malaysia and around the world. Acquiring these assets from IPIM and Maven meets KWAP real estate investment objectives for targeting strategic, diversified portfolios in foreign markets with a focus on revenue generating portfolios. KWAP is pleased to be working with a UK-headquartered investment partner, 90 North, a company with a global reputation for its ethical investment approach.”

Selina Williams, Executive Director at IPIM, said: “KWAP’s acquisition shows the ongoing institutional demand for high quality operational assets such as the Mill House and 800 Bristol Road. IPIM will continue to work with Maven to develop UK PBSA schemes following this successful exit of our first developments together.”

Philip Churchill, Founder and Managing Partner at 90 North, said: “We’re excited to have created this opportunity for KWAP to enter the UK’s attractive student accommodation sector. The two properties forming part of this deal are low-risk, incoming generating assets, that have been developed by the current owner IPIM and the asset manager, Maven. Our extensive knowledge of the sector, underpinned by an outstanding investment track record, means we’re in an excellent position to help KWAP acquire steady income assets with rental and capital value growth potential.”

Andrew Whiteley, Investment Director at Maven, said: “We are delighted with the return on investment these high quality student properties have achieved for investors. The PBSA sector continues to offer excellent opportunities for institutional and overseas investors, such as KWAP and 90 North to acquire income generating assets and following the success of the first exits we have completed with IPIM, we look forward to continuing our relationship to identify new sites for development.”

The Mill House at 396-400 Gorgie Road, is a 257-bed student accommodation asset located west of the Edinburgh city centre between Edinburgh University and Edinburgh Napier University. The building comprises 227 en-suite clusters, 30 studios, and 1 ground floor retail unit. The property is managed by Fresh Student Living.

800 Bristol Road is a 103-bed studio student accommodation asset located within walking distance to the University of Birmingham. The property is managed by Collegiate AC. Both assets are 100% pre-let for the 2018/19 academic year.

Bidwells acted for the vendor while both Robert Irving Burns and MacLaren & Partners acted for the buyer.