UK: Round Hill Capital has formed a €1 billion joint venture with Canada Pension Plan Investment Board.
The JV, targeting assets in excess of €1 billion, will be one of the largest European student accommodation partnerships. It will invest in existing assets and new developments across PBSA markets in continental Europe. CPP Investments’ initial allocation of equity will be €475 million. Assets will be operated primarily by Nido Student, Round Hill Capital’s specialist PBSA brand.
By year end the JV is expected to have approximately 2,000 beds secured in Spain and the Netherlands based on contracted assets and those under exclusivity
Michael Bickford, founder and CEO of Round Hill Capital, said: “We are delighted to be partnering with CPP Investments in our joint mission to raise the quality of PBSA assets across the continent. This joint venture, one of the biggest European PBSA partnerships to date, represents another market leading investment platform for Round Hill Capital. This ground-breaking deal illustrates the strength of our investment offering underpinned by our vertically-integrated structure which includes Nido, a market-leading student housing brand. With 40 PBSA acquisitions to date, worth a collective €1.8 billion, we are firmly established as a market leader.”
CPP Investments is responsible for investing assets on behalf of more than 20 million CPP contributors and beneficiaries in Canada.
Andrea Orlandi, managing director, head of real Estate Europe at CPP Investments, said:
“Demand for high-quality student accommodation in many European countries is underpinned by structural changes, including increasing tertiary education participation rates and increasing international student mobility, but is contrasted by limited current supply. Our new partnership with Round Hill Capital will increase our exposure to this asset class across European markets, leveraging their deep sector knowledge and insight to meet the needs of students and drive long-term value for CPP contributors and beneficiaries.”
Brian Welsh, head of student at Round Hill Capital, said: “There are unprecedented levels of capital looking to invest in resilient income streams, but the challenge many will face is having access to deal flow and having the market insight and data to extract maximum value. Our long track record in this sector and local presence in core European markets has helped us establish a market-leading position over many years. We are seeing significant scope for growth in many markets and together with our student operating platform, Nido, we have the track record to navigate the nuances that define many different cities across Europe. High quality housing remains in short supply in many locations and while much more can now be done online, the need for face-to-face engagement and the desire for a world-leading education will continue to drive customer growth across key markets.”
