UK: The Competition and Markets Authority (CMA) has expressed concerns over the acquisition of Student Roost by a joint venture comprising Singapore sovereign wealth fund GIC and Greystar Real Estate Partners.
The partners announced their plans to acquire Student Roost from Brookfield for £3.3 billion back in May. The company’s portfolio comprises more than 23,000 beds with a secured development pipeline of approximately 3,000 further beds covering key university cities, many of which are home to prestigious Russell Group institutions.
In its phase one assessment, the CMA found the acquisition would not lead to competition concerns in most cities because the combined businesses would continue to face sufficient competition from other accommodation providers.
However, in Birmingham, the CMA says there will be insufficient competition across several university campuses, potentially resulting in higher prices and lower quality services for students.
GIC, Greystar and Student Roost intend to offer remedies to address these concerns.
Colin Raftery, senior mergers director at the CMA, said: “Aside from fees, rent is the biggest expense students face, and the rising cost of living is putting even more pressure on student budgets. Many university towns and cities are already dealing with a student accommodation shortage, which is why it’s crucial that private providers like those involved in this deal are competing effectively.
“We’re concerned this deal could result in students in Birmingham seeing higher prices or lower quality services. GIC, Greystar, and Student Roost have accepted our concerns and have told us that they plan address them. A solution that fully resolves our concerns will avoid the need for a more in-depth investigation,” he added.
The CMA expects to receive a formal proposal within the next few days. If the proposed remedy addresses the CMA’s concerns, the merger will be cleared without the need for an in-depth phase two investigation.
Greystar already operates high-end student housing brand Chapter, while GIC has made several UK PBSA investments over the past decade, including a number of purchases made alongside Unite.
