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UK Student Accommodation


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  • 1. Investment proposalStudent Accommodation in the UKJune, 2011
  • 2. Table of ContentsAXIO Capital 3-5Student Accommodation Market Information 6 – 14Current Projects 15 - 26The Deal organization 27Exit Strategy 28Contacts 29 AXIO CapitalJune, 2011 2
  • 3. AXIO Capital AXIO CapitalJune, 2011 3
  • 4. AXIO Capital Investment company, which attracts and invests in various real estate projects in Latvia and UK. More than 10 years of experience in the Latvian market and 4 years of experience in the United Kingdom market. Andis Riekstins. Axio Capital founder. Before that he worked and formed Latvian largest leasing company SIA Swedbank Līzings. Since 2002 works in private business, fund raising and investment management. Attracted funding for implementation of various projects more than 80 million EUR in Latvian and Russian markets. Has experience with projects in sectors such as real estate, food processing, shipping, airports, retail, etc. Juris Lujans. 8 years experience in the financial sector and six years experience in real estate development. Was the chairman of Mortgage Bank of Latvia and the Minister of Economics. Since 2003 was the founder and manager of Latvian largest residential villages developer company, the realizing more than 300 private houses building and selling process. AXIO CapitalJune, 2011 4
  • 5. AXIO Capital partners and experience AXIO Capital cooperation partners RE&RE. Second largest construction company in Latvia with annual turnover of EUR 80 million. Nordic Construction UK (50%) RE&RE. The activities was begun in UK in 2009 year. Experience More than 15 years experience of the construction in Latvia ( Southampton. Two detached blocks of flats Construction of a leisure development in French Alps – 2 projects (40 residential units) Exeter, Devon. 4 storey, 33 studio flats development AXIO CapitalJune, 2011 5
  • 6. Student AccommodationMarket Information AXIO CapitalJune, 2011 6
  • 7. UK market situation the Key Points UK higher education is No. 1 in the world Student growth is 5-8% in recent years Deficit of special purpose halls of residences is constant The existing halls of residences are full to 100% Average 30 - 50% of students live in inadequate accommodation buildings AXIO CapitalJune, 2011 7
  • 8. Universities in the UKTOP 20 UK universities by size (2009-2010) Total number of Universities - Rank Institution Total students 118 1 The Open University 209 705 2 University of Manchester 40 400 Total number of Students - 2,49 3 Manchester Metropolitan University 35 730 million (2009-2010) 4 Sheffield Hallam University 35 410 London has 40 higher education 5 University of Nottingham 34 120 6 University of Leeds 33 585 institutions and has a student 7 University of the West of England 32 840 population of more than 400 000 8 University of Central Lancashire 32 295 The maximum tuition fee 9 University of Plymouth 32 200 (students from UK and ES) a 10 Northumbria University 31 425 11 University of Birmingham 30 125 university or college can charge 12 Cardiff University 29 685 is: 13 Teesside University 29 055 £3290 for 2010-11 14 University of Warwick 28 870 £3375 for 2011-12 15 University of Greenwich 28 805 £9000 for 2012-13 16 Leeds Metropolitan University 27 865 17 University of East London 26 930 Tuition fees for overseas students 18 Liverpool John Moores University 25 860 – from £8750 (2009-10) 19 University of the Arts London 25 750 depending on the course 20 London Metropolitan University 24 335 AXIO CapitalJune, 2011 8
  • 9. Rankings of Universities in the UK (2010)TOP 30Rank Name Rank Name 1 Oxford University 16 Loughborough University 2 Cambridge University 17 Kings College London, University of London Imperial College of Science, Technology & 3 18 The University of Sheffield Medicine 4 University of St Andrews 19 Southampton University 5 London School of Economics and Political Science 20 The University of Nottingham 6 The University of Durham 21 Sussex University 7 University College London 22 The University of Birmingham 8 University of Warwick 23 University of East Anglia 9 University of York 24 Glasgow University 10 Lancaster University 25 Newcastle University 11 Edinburgh University 26 Leeds University 12 Exeter University 27 School of Oriental and African Studies (SOAS) 13 The University of Bath 28 Liverpool University 14 University of Bristol 29 Aston University 15 Leicester University 30 The University of Manchester AXIO CapitalJune, 2011 9
  • 10. The Student Accommodation in UKMarket Information Higher education student population (million) Demand 2,55 The total number of people in higher education 2,5 has grown from 1.8 million in 1996-7 to 2,45 approaching 2.49 million in the academic year 2,4 2009-10. 2,35 The majority of key university towns reported 2,3 nearly 100% occupancy for the last academic 2,25 year, with private halls targeting affluent 2,2 domestic students, overseas students and 2,15 mature students, the latter two of which are growing in number. Source: Higher Education Statistics AgencyRental growth is of 5% per annum over the last six years in the student accommodationsector, compared to 0,6% for commercial property. AXIO CapitalJune, 2011 10
  • 11. The Student Accommodation in UKMarket InformationAccommodation options Approximate average costs for students Institution maintained property per year Private-sector halls Tuition fees £ 9 000 Parental/Guardian home Accommodation £ 5 500 Own residence Living costs (food, bills etc.) £ 6 500 Other rented accommodation Other TOTAL £ 21 000 Supply The supply of privately run purpose built student accommodation continues to be dominated by the largest four service providers – UNITE, UPP, Opal and Liberty Living. Although there has been substantial development, existing supply levels still mean the vast majority of students are not able to take the option of a privately operated room. Only 26% of London’s higher education students are able to access halls, with only 3% having access to private sector halls. AXIO CapitalJune, 2011 11
  • 12. University Partnership Programme (UPP)Market information University Partnerships Programme (UPP) is the UK’s leading provider of on-campus managed university accommodation UPP specialises in establishing long-term partnerships with universities to fund, develop and operate student accommodation. With more than a decade of experience, UPP delivers risk-free property solutions which are fully funded by UPP UPP is owned and actively supported by funds managed by Barclays Infrastructure Funds, part of Barclays Capital 39 000 students in 126 properties across 33 towns and cities across the UK AXIO CapitalJune, 2011 12
  • 13. DefinitionsMarket Information Standard room – room without private bathrooms En suite room – room with private bathrooms Studio provide a modern approach to self contained accommodation where students have their own facilities. The accommodation comprises a combined living and bedroom area, en suite shower room and kitchen facilities. Cluster Flat – apartment consists of standard rooms or en-suite rooms with shared kitchen Catered hall of Residence - Dining facilities are either in the Hall or in another Hall close by and are canteen style service. AXIO CapitalJune, 2011 13
  • 14. Links PageMarket information Unite Plc UPP Limited Opal Property Group Limited Plymouth University (Accommodation) Exeter University (Accommodation) AXIO AXIO CapitalJune, 2011 14
  • 15. Current Projects St. Augustine’s Project in Plymouth Sidwell Street apartments in Exeter AXIO CapitalJune, 2011 15
  • 16. Location Exeter Plymouth AXIO CapitalJune, 2011 16
  • 17. St. Augustine’s Project in Plymouth AXIO CapitalJune, 2011 17
  • 18. Project descriptionSt. Augustine’s Project in PlymouthIt is planed to develop fully equipped student accommodation for students of PlymouthUniversity with 84 studio rooms with internet access, bike storage and CCTV. Alexandra road, Plymouth 6 floor modern building Total space 2880 sq m 7 flats and 77 studio St. Augustine’s apartments are within 15 min walking distance of the University Letting period 43 or 51 weeks Estimated price (equivalent market prices) Studio – 170 GBP– 190 GBP per week Flat – 120 GBP – 170 GBP per week AXIO CapitalJune, 2011 18
  • 19. Market informationSt. Augustine’s Project in Plymouth Accommodation options University allocated accommodation: ◦ University-managed hall of residence (are managed by UPPL) total number 6 (468 standard rooms, 1168 en-suite rooms, 122 large en-suite rooms and 14 studio rooms) ◦ University-allocated cluster flats (owned and managed by Unite plc) total number 4 (108 standard rooms, 639 en-suite rooms, 14 studio rooms) University approved accommodation Agencies and Managing Agents Current Uptake 100%The University of Plymouth has over 30 000 students and an annual income of around£160 million.There remains a 40% shortfall of available accommodation for first-year students. AXIO CapitalJune, 2011 19
  • 20. St. Augustine’s location “St. Augustine” Alexandra road, Plymouth All approved student accommodation is within the highlighted area, and is therefore within walking distance of the main campus. AXIO CapitalJune, 2011 20
  • 21. Financial informationSt. Augustine’s Project in Plymouth Total planed investments 4.2 m GBP Land 0.6 m GBP Construction 2.9 m GBP Other 0.7 m GBP Equity 1.28 m GBP Construction period 12 months Estimated sales price 5 m GBP Sales period One year after construction Estimated IRR 19% AXIO CapitalJune, 2011 21
  • 22. Sidwell Street apartments in Exeter AXIO CapitalJune, 2011 22
  • 23. Project descriptionSidwell Street apartments in ExeterIt is planed to develop fully equipped student accommodation for students of ExeterUniversity with 96 rooms: 67 en suite rooms in cluster flats, 26 studio and 3 doublebed flats with internet access, cycles storage, Laundry and CCTV. Sidwell Street 69 - 73, next to the cinema Odeon, in the centre of Exeter The existing building will be demolished 6 floor modern building in the centre of Exeter 67 en suite, 3 flats and 26 studio Retail area for rent on Ground Floor Sidwell Street is located midway between the Streatham Campus and St. Luke’s Campus Letting period 43 or 51 weeks Estimated price (equivalent market prices) En-suite room 140 GBP per week Studio 170 GBP – 190 GBP per week Flat 120 GBP – 170 GBP per week AXIO CapitalJune, 2011 23
  • 24. Sidwell Street apartments Location 69 – 73 Sidwell Street, Exeter Sidwell Street 69 – 73 is located midway between the Streatham Campus and St.Luke’s Campus AXIO CapitalJune, 2011 24
  • 25. Market informationSidwell Street apartments in ExeterUniversity accommodation is accommodation owned, managed or approved by theUniversity of Exeter Catered Halls of Residence total number 5 (1423 single rooms and 117 twin (shared) rooms) Self – Catering Residences total number 13 (1159 en-suite rooms, 1174 standard rooms and 258 studios rooms) Current Uptake 100%UPP has entered into a long-term partnership with the University of Exeter to provideadditional student accommodation on the university’s Streatham Campus. The three-year construction project started in 2009. Investment - £130 million. Occupancy: 100%at start of academic year 2009/2010.UPP’s partnership with the University of Exeter involves the transfer of 980 rooms ofexisting accommodation, of which 621 will be retained and operated by UPP AssetManagement. The remainder will be redeveloped to provide 1948 new en suite rooms,built using UPP’s Eco Residence model.The University of Exeter has 15 700 students and an annual income of around £227million. AXIO CapitalJune, 2011 25
  • 26. Financial informationSidwell Street apartments in Exeter Total planed investments 6.9 m GBP Land with existing building 2.5 m GBP Construction 3.5 m GBP Other 0.9 m GBP Equity 3.4 m GBP Construction period 12 months Estimated sales price 8.4 m GBP Sales period One year after construction Estimated IRR 22% AXIO CapitalJune, 2011 26
  • 27. The Deal organization AXIO CapitalJune, 2011 27
  • 28. Exit Strategy After construction to sell to operator ◦ UNITE ◦ UPP ◦ Opal ◦ Liberty Living etc. After construction to sell to financial investor ◦ Investment funds ◦ Pension funds etc. After construction to operate from 1 to 2 years, to get rental income and then to sell AXIO CapitalJune, 2011 28
  • 29. Contacts Andis Riekstins phone: +371 29 455 355 AXIO Capital UK Ltd. London, 37 Knox rd, GU2 9AH, Guildford, Surrey phone: +44(0) 07515253095, fax: +44(0) 1483243501 e-mail: / SIA AXIO Capital Mārupes nov., Mārupe, Kārļa Ulmaņa gatve 119, LV-2167, Latvija phone.: +371 67 244 122, fax: +371 67 504 614 e-mail: AXIO CapitalJune, 2011 29