Investor KKR has formed a partnership with Round Hill Capital to target the student accommodation sector and seeded the joint venture with the acquisition of a 7 acre site in the Netherlands.
KKR and Round Hill, along with their partners on this acquisition, Stadium Capital Partners, plan to build two towers for 577 purpose-built student accommodation (PBSA) beds at the site in Utrecht by converting the dilapidated Oudenrijn hospital building and developing a new 23-storey building. In addition, 173 residential apartments will be built on the site targeted at young professionals as well as commercial space and dedicated amenities and common areas for the students.
On completion, the PBSA will be managed by The Nido Collection, Round Hill’s student accommodation specialist brand. The deal marks the first investment in European student housing for KKR which has pledged to use resources from its recently closed $739m Real Estate European Partners Fund to further invest in the sector.
The site, acquired from Ontwikkelings Combinatie Oudenrijn, is located between Utrecht Central railway station and it will be connected directly to the Utrecht University via a new tram stop close to the building that will open in 2019. Utrecht is the second largest student city in the Netherlands, with a population of approximately 60,000 students.
Targeting 20,000 beds by 2020
Independently, Round Hill is currently funding a pipeline of over 7,000 student accommodation beds across the UK, Ireland, the Netherlands, Portugal and Spain. The group is targeting to secure 20,000 student beds in these markets by 2020.
Seb d’Avanzo, director at KKR, said: “This is a high-quality development in an excellent location, and we see significant upside potential in the Netherlands, a market which exhibits strong growth drivers for student housing. KKR’s European real estate platform has a successful track record in executing partnership deals, and this acquisition represents an exciting first step in KKR’s partnership with Round Hill Capital. We look forward to working with them to expand our footprint in student accommodation and residential housing in select European markets.”
Michael Bickford, founder and chief executive of Round Hill Capital, added: “Round Hill has more than a 12 year track record of successful investment and development as well as asset management expertise across residential real estate in Europe, and this transaction, alongside our other recent Dutch investments, significantly enhances our platform in the Netherlands, which remains a key focus of our strategy. This high quality student and residential housing development scheme, our first student housing scheme in the Netherlands, will help to meet the continuing growing demand for housing within Utrecht.”
KKR and Round Hill secured financing for the project with ING Bank NV.