Far East Orchard Launches Inaugural Student Accommodation Fund First Close Gbp70 Mil
Singapore-listed Far East Orchard has launched its first private fund in the city-state, the FE UK Student Accommodation Development Fund (FESAD). The fund has received its first close of GBP70 million ($120.13 million) and has a target aggregate commitment of GBP100 million. FESAD will invest in Purpose-Built Student Accommodation (PBSA) development opportunities in the UK.
The fund has already secured a development site in Glasgow, Scotland, which was acquired in March. The site has been earmarked for a 273-bed student accommodation project. Far East Orchard has announced that the fund will target “high-potential” PBSA development projects in the UK.
Far East Orchard’s wholly-owned subsidiary, Far East Orchard Investments (UK) Pte Ltd, has committed GBP35 million of the GBP70 million committed by limited partners. According to Far East Orchard, there is a high demand for both university places and student accommodation in the UK. Citing CBRE data, the company estimates a current shortfall of 580,000 beds in the UK.
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In its results for the first half of FY2024 ended June 30, Far East Orchard reported that reservations for its UK PBSA portfolio for the academic year commencing September stood at around 92%. The launch of the fund comes after Far East Orchard’s acquisition of a 49% stake in Homes For Students, the UK’s largest independent PBSA operator, in April.
Group CEO of Far East Orchard, Alan Tang, says: “Having been in the UK PBSA business since 2015, we have established a track record in the market and remain confident in the sector given its strong fundamentals, robust student demand, and structural supply-demand gap.”
He adds: “Moving into the fee-based investment management business is a natural progression in addition to our current operating fee-based model to leverage our investment and asset management capabilities in the PBSA business in the UK.”
In other related news, CDL has recently acquired a private rented sector project in Manchester for GBP75.6 million. The project is expected to be completed in 2021 and will have 363 units.