Student accommodation, the leading market segment for furnished rentals in France, is set for an uninterrupted increase in demand in the face of the continuous increase in the population of students and young professionals – deepening the existing rental market’s tension in some regions. As such, the Association of Student Housing alerted the French Senate in March 2021, as it estimated a 250,000 units shortfall in student housing across France.
Under a new identity, UXCO Group – inspired by the group’s historical values: ‘UX’ for User Experience and ‘CO’ for Community and Co-living – has initiated a move to significantly accelerate its development with the opening of eight new co-living residences in seven cities in France at the start of the school year 2021: Bordeaux, Caen, Montpellier, Pau, Pontoise, Rouen and Saint-Etienne – which will provide around 1,000 additional beds. It also plans to open six new residences in 2022, representing a total of 2,700 beds.
This acceleration will allow UXCO Group to establish itself as the benchmark in the student and young professional housing segment in France – offering premium residences each providing from 100 to over 1,000 units. In addition to combining comfort and high-end quality of private and shared spaces, UXCO Group has developed a turnkey concept, which in addition to accommodation, includes co-working spaces, sports, cultural and leisure facilities as well as catering services.
“Operating under a new single banner, the UXCO Group, allows us to better express our identity with a new branding that better reflects our everyday mission: deploy our capabilities to provide the best experience for our community, while relying on a solid background and expertise of the real estate value chain to accelerate our development.”Jacques-Edouard Charret, President, UXCO Group
Development strategy combining operational excellence and extensive investments in student housing
UXCO is a subsidiary of Grand M Group, the leading developer, owner and operator of student housing, aparthotels, and co-living assets in France. Brookfield Asset Management private real estate funds acquired a majority interest in Grand M Group in 2018.
In parallel, in 2018, Grand M Group started a new stage of its development by shifting its model towards the acquisition of real estate assets managed by the Group, a new activity that led to the addition of a complementary expertise to provide a comprehensive and sustainable offer to manage the entire value chain. Since then, UXCO Group designs, finances, and builds the real estate assets that it then manages under the UXCO and ECLA brands.
With an investment plan of up to €1bn by 2023, the Group confirms the evolution of its business model through the acceleration of property development.
With UXCO, a new platform dedicated to the housing of young people and a pioneer in introducing co-living in France, UXCO Group has the investment capacity to target very significant development. Since the creation of the largest student residence in Europe, ECLA Palaiseau, in 2018 (1,300 beds), it has quadrupled the size of its portfolio of beds with the recent acquisition of eight new generation student residences (including three opening this year). In 2022, a pipeline of nearly €800m (2,700 beds) should also be completed to meet the increasingly demanding needs of students and young professionals 2.0.
“While we pursue the development of high-quality residences in prime locations for students and young professionals, we also closely monitor the development projects French cities’ administrations undertake. Following this dynamic, several acquisitions and investment partnerships are currently being finalised. This is a value-creation strategy for which we expect double-digit profitability over the entire holding period.”Emmanuel Pariente, Chairman, Grand M Group
The UXCO Group’s objective is to develop and operate a portfolio of 20,000 beds by 2025, targeting acquisitions mainly in the Greater Paris area, but also in major French student cities – where the so-called alternative housing market is under-supplied. UXCO Group is in discussion with several local authorities in charge of development projects to create targeted investment vehicles that will strengthen the Group’s geographical coverage. The Group will also be able to count on synergies with the developer Océanis, also a subsidiary of Grand M Group, through the execution of joint projects: to date, four projects are under construction and other projects are being finalised.
“We anticipate a strong rebound from the start of the 2021 school year with the roll-out of the health pass. Within the large property market for students and young professionals, we see a high demand for student residences. This trend is expected to further grow, and we are pleased, through the opening of eight new residences, to provide a solution that meets the expectations of students and young workers but also allows us, at our level, to respond to the structural deficit of housing for these populations in certain regions of France.”Jacques- Edouard Charret, President, UXCO Group