16 | PROMOTION: CAMPUS LIVING VILL AGES
W:
www.universitybusiness.co.uk | T: @UB_UK
Could you tell us more about CLV’s recent purchase of the Opal sites? CLV has acquired 4,539 beds in eight student accommodation properties in Leeds, Manchester, London, Notingham, Birmingham, Liverpool and Newport. The acquisition was made in a joint venture with Arlington Investments, with debt funding provided through a 50-year bond listed on the Dublin Exchange.
Can you discuss your plans for the sites? The properties were particularly atractive to CLV due to the strategic connections which the majority have with a number of universities, reflecting CLV’s partnership objectives. Notwithstanding that 85% of
Keeping up on campus
Gary Clarke, CEO of global student accommodation specialists Campus Living Villages, discusses the evolving HE market
the beds are not physically located on a university campus, around 65% benefit from existing medium- to long-term nomination or lease arrangements. We would like to move this up to 80% over the coming 2–3 years, with the balance 1,000 or so beds then representing a modest exposure to the direct let market, with the commensurate revenue opportunities.
What does this mean for the future of CLV, and how are you looking to expand further? The acquisition of the Opal properties, together with existing development and management commitments, takes CLV’s portfolio to over 11,200 beds in the UK, with visibility into a pipeline of a further 10,000 beds at various stages of discussion or bid activity. We have reflected in the process whether the inclusion of off-campus assets in the portfolio risks diverting focus from the core concession model with which CLV is more usually associated. In our view, we are a university partnership business, and will develop and operate properties where opportunities arise for us to support the strategic accommodation requirements of our university partners, whether in the heart of a provincial
parkland campus or in the centre of major university cities.
How has the HE sector, and student requirements, changed over the years? We have operated in the UK since 2008. Even in that short time we have seen the increasing emergence of the student ‘consumer’. Students have extensive choice in a wide range of academic opportunities and associated services, such as accommodation, and are increasingly uncompromising in their decision-making. The pursuit by developers in recent years of hotel-style student accommodation standards will increasingly need to be matched in the quality of the residential product delivered through the operating model. En suite rooms and well-appointed common spaces are no longer a differentiator. Customer service, contract flexibility, security, study support, Wi-Fi offering and the whole residential experience are becoming
“Too much development has been commited to speculative student accommodation schemes in major university cities in recent years”
poor locations and without any obvious insight into existing supply or the business models of the universities in those cities. A number of these will not realise the profitable exits their sponsors had hoped for.
Are there any geographical hot spots around the UK that are more profitable than others? Any potential hot spots which may have existed for specialist investors a few years ago in major university cities, London in particular, have been prety much neutralised by the sheer influx of capital into the sector. Any potential for capital gain in off-campus assets in key locations is now heavily discounted into cap rates as the sector has become an increasingly mainstream asset class. In the on-campus sector, universities are increasingly looking to optimise risk allocation between the university and the accommodation provider to drive debt and transaction economics. I think the UK student accommodation sector remains an atractive market in which to earn stable returns for sensible long-term risks, but I think hot spots are currently few and far between. UB
increasingly important in the overall purchasing decision.
Gary Clarke
Is the student accommodation sector still a profitable one? Based on a sustainable business model, good sector intelligence and a long- term investment horizon, the sector is still able to generate long-term returns commensurate with risk. I do however fear for investors who have entered the sector in recent years with a view to making short-term development profits. Too much development has been commited to speculative student accommodation schemes in major university cities in recent years, often in
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48 |
Page 49 |
Page 50 |
Page 51 |
Page 52 |
Page 53 |
Page 54 |
Page 55 |
Page 56 |
Page 57 |
Page 58 |
Page 59 |
Page 60 |
Page 61 |
Page 62 |
Page 63 |
Page 64 |
Page 65 |
Page 66 |
Page 67 |
Page 68 |
Page 69 |
Page 70 |
Page 71 |
Page 72 |
Page 73 |
Page 74 |
Page 75 |
Page 76 |
Page 77 |
Page 78 |
Page 79 |
Page 80 |
Page 81 |
Page 82 |
Page 83 |
Page 84 |
Page 85 |
Page 86 |
Page 87 |
Page 88 |
Page 89 |
Page 90 |
Page 91 |
Page 92 |
Page 93 |
Page 94 |
Page 95 |
Page 96 |
Page 97 |
Page 98 |
Page 99 |
Page 100 |
Page 101 |
Page 102