Investment agency Harris Associates has officially launched The Future Portfolio that comprises 2,049 student beds across five freehold assets in chronically undersupplied student UK cities: Nottingham, Guildford, Colchester, Sheffield and Loughborough.
Harris Associates has been instructed on behalf of Southern Grove and Tadhamon Capital, and has undertaken an engaging marketing campaign, from educational social media videos to an interactive investor website.
The portfolio features spacious cluster en-suites (66%), studios (24%), townhouses (6%), and one-to-three-bedroom apartments (4%). With rising construction costs, the current regional PBSA pipeline largely focuses on studios, making this composition as majority clusters unlikely to be built again.
“We are thrilled to introduce The Future Portfolio, a collection of the UK’s leading PBSA assets. Being at the forefront of marketing in the agency world, Harris Associates filmed videos at each location to showcase the assets to potential buyers, while speaking to student occupiers.
“There was unanimous positive feedback, focusing on the best-in-class design and specification, strong micro-locations and vibrant community events that these schemes offer.
“The Future portfolio is an opportunity to acquire a truly transformative portfolio and amass scale in key university cities with structural undersupplies. With its defensive mixture of clusters to studios, a portfolio of this nature is simply unable to be built again.”Jamie Harris, Head of Student Accommodation, Harris Associates
Each asset provides tailored amenities depending on location-needs and includes a cutting-edge gym for Loughborough’s athletes, customised performance spaces for Guildford’s dance and drama students, and dedicated Gaming Areas for Nottingham’s Esports enthusiasts. Complementing these tailored features are residential amenities including roof terraces, outdoor wellness areas, lounges and study hubs.
Through Future Generation’s partnership with Samsung, every room has a high-specification TV and integrated air conditioning that is, as the effects of climate change amplify, a significant source of future rental growth.
“You truly get what you pay for in Luxurio student accommodation. All the bills are included, and the amenities are excellent. By that, I mean you have your very own AC and TV in your room, and you don’t have to pay for a gym membership.”Zeynep, Postgraduate student residing in the Luxurio building in Loughborough
The UK student market continues to experience structural undersupply as 67% of the full-time students are unable to access PBSA. All five schemes represent a rare opportunity to amass considerable scale in the sector, a marketplace with strong tailwinds and structural under-supply.
Presenting a diverse and defensive income profile, the portfolio boasts a strong blend of domestic (c.45%) and international (c.55%) student residents. Student satisfaction across the PBSA sites’ Google reviews are high, with an average rating of 4.3/5.
Anticipated to generate a gross operating income (GOI) of £20.695m in the academic year 2023/24, the forecast also highlights strong rental growth prospects for the subsequent academic year. For example, the Vantage PBSA development is the closest scheme to the new University of Nottingham Castle Meadow Academic Campus, which is opening in 2023, and will be home to 5,000 post-graduate students by 2025.
“We are delighted to have developed and operated this future-facing portfolio of assets, at the cutting edge of design and experiences. The portfolio has been carefully crafted for the next generation of students – with comprehensive amenity spaces and consistent events for students. We are excited to have partnered with the best agent, Harris Associates, and commercial lawyers, Howard Kennedy to present our unique offering to the market.”Andrew Southern, Chairman, Southern Grove
Howard Kennedy LLP is advising the entities which are selling The Future Portfolio, Southern Grove and Tadhamon Capital, on all aspects of the sale transaction. The team is being led by Partner Graham Kaye, Partner Astrid Stanley, and Co-Head of Corporate Real Estate Charlotte Whitworth.
“We have been working with Southern Grove and Tadhamon Capital since early 2022 and are looking forward to working with Harris Associates on this exciting sale of The Future portfolio.”Graham Kaye, Partner, Howard Kennedy LLP