Far East Orchard launches fund to invest in UK purpose-built student accommodation

(Photo credit: Far East Orchard)

Source: The Straits Times

Far East Orchard has established its first private fund in Singapore, and completed its first closing of £70 million (S$120 million) on Aug 22.

The company announced that the fund, called the FE UK Student Accommodation Development Fund, will invest in purpose-built student accommodation (PBSA) development opportunities in Britain.

The fund has a target aggregate commitment of £100 million.

The company said that the fund is seeded with a development site in Glasgow, Scotland, where a 273-bed student accommodation project will be constructed. The site was acquired by the group in March.

Far East Orchard noted that the local British student population is currently at its highest level. Projections provided by the Higher Education Policy Institute forecast an additional 358,000 university places needed by 2035, it said.

Furthermore, it said the group’s PBSA portfolio’s reservations stood at 92 per cent for the academic year commencing in September, reflecting “strong continued demand” for such housing.

In April, the company announced that it had acquired a 49 per cent stake in independent PBSA operator Homes For Students. It said that the move would enhance the operating management capabilities of the group’s PBSA business and strengthen its position in the British PBSA sector.

Far East Orchard group chief executive Alan Tang said: “Moving into the fee-based investment management business is a natural progression in addition to our current operating fee-based model to leverage our investment and asset management capabilities in the PBSA business in the UK.

“It allows the group to grow its recurring income stream as it steers towards an asset-light business model, ultimately reducing its balance sheet exposure and delivering greater sustainable value to shareholders.”