The Carlyle Group has formed a joint venture with Benelux Property Group to build student accommodation called City Living in the region.
The real estate team said it wants to create 5,000- 7,000 beds, making the investment out of CEREP III, which closed in 2008 on €2.2 billion of equity.
The Benelux Property Group is itself a joint venture between Opal Group, the UK’s largest private owner of student accommodation, and a private family.
The JV will develop a maximum of 20-25 properties in the Netherlands and Belgium over the next five years. Carlyle and Benelux Property Group will provide finance for the acquisition and development of the sites and be responsible for the planning, design and construction phases of the projects. The finished assets will then be let on long leases of 20-25 years to City Living SA, in which Carlyle is also a minority stakeholder.
Agnès Riban, associate director of Carlyle, based in Paris, will oversee Carlyle’s investments in the region.
The joint venture’s portfolio currently comprises two properties, a newly refurbished 146-room student housing unit called Home Ruhl in Liege, Belgium, which has been 100 percent let since opening in September 2008.
The second property is a development project called Van Limburg Stirum Huis in The Hague in the Netherlands, which is currently a retirement home located close to the Den Haag Holland Spoor train station and several universities and colleges. The current occupiers will vacate the property in 2012. Once it has been refurbished it number of rooms will have increased from 170 to 250. The building ready for occupation the start of the September 2013 academic year.
“Student accommodation has emerged as a very stable and resilient asset class, underpinned by increasing numbers of students attending universities and an ongoing lack of supply,” said Carlyle in a statement. “This is constrained by the fact that universities tend not to be new producers of student accommodation and the relatively high barriers to entry for private sector participants.”
The business model has been proven in the UK, where the City Living management team has built over 60,000 student accommodation beds over the last 25 years and currently has 20,000 beds fully let and under management through Opal.