Blackstone unveils new student housing venture

Beginning with a £95m investment in a London dormitory, the private equity real estate firm is set to expand its student accommodation brand across Europe.

The real estate arm of The Blackstone Group is planning a major push into the student housing sector beginning with a £95-million investment in its first major student housing development, Nido London, which will be unveiled this week and open to students in September 2007.

Located in King’s Cross, the 16-story student residence hall will provide housing for 950 students and will include 20,000 square feet of office space, 14,000 square feet of retail space and parking spaces for 40 cars and 250 bicycles. Rooms will cost £120 per week for a shared room and £180 per week for a single. Occupants will have access to high-speed internet, voice over IP, separate study rooms and a free gym.

“On the whole student living standards in the UK are awful,” said Stuart Grant, managing director of Blackstone Real Estate, in a statement. “We have identified an opportunity to reinvent the student accommodation experience.

On the whole student living standards in the UK are awful.

Stuart Grant, managing director, Blackstone Real Estate

Last year, Blackstone teamed up with the developer Elliott Lipton to build the project, converting existing office buildings into student accommodations. The private equity real estate firm plans to roll out similar projects based on the Nido design throughout Europe. Earlier this year, Blackstone acquired a 125,000-square-foot building, Rodwell House, in the City of London with plans to convert it into one of London’s largest student halls.

Blackstone is one of several private equity and real estate firms targeting the student housing sector. Over the past two years, Lehman Brothers has entered into two joint ventures with UNITE, one of the largest providers of student housing in the UK, for projects in Leeds and Sheffield.