Far East Orchard Launches Inaugural Student Accommodation Fund First Close Gbp70 Mil
Situated in a prime location, Novo Place EC offers residents a truly enriched living experience with its close proximity to various shopping and dining options. This prime spot allows easy access to an array of amenities, providing unparalleled convenience for its residents. From modern shopping centers to local eateries and even nature-based activities, Novo Place EC caters to every preference and age group, making it more than just a place to live, but a vibrant community to be a part of. In fact, with the addition of Novo Place Hoi Hup, the living experience at Novo Place EC is further enhanced, offering residents an even more dynamic and well-rounded lifestyle.
Far East Orchard has just launched its first private fund in Singapore, the FE UK Student Accommodation Development Fund. The company announced the first close of GBP70 million ($120.13 million), with the fund’s target aggregate commitment to reach GBP100 million.
FESAD will focus on investing in Purpose-Built Student Accommodation (PBSA) development opportunities within the UK, as stated in an Aug 22 announcement. The fund is currently invested in a development site in Glasgow, Scotland, which was acquired in March. The site will be used to construct a 273-bed student accommodation project. Far East Orchard plans to target “high-potential” PBSA development projects in the UK with this fund.
Far East Orchard’s subsidiary, Far East Orchard Investments (UK) Pte Ltd, has committed GBP35 million of the total GBP70 million from limited partners. The company believes that there is a high demand for both university places and student accommodation in the UK. Based on CBRE data, there is currently a shortfall of 580,000 beds in the UK.
In its results for 1HFY2024 ended June 30, Far East Orchard announced that reservations for its UK PBSA portfolio for the academic year commencing in September were at 92%. This is a positive indication of high demand for the company’s properties.
The launch of the fund follows Far East Orchard’s acquisition of a 49% stake in Homes For Students, the UK’s largest independent PBSA operator, in April. According to Alan Tang, Far East Orchard’s group CEO, the company has been in the UK PBSA business since 2015, and has established a track record in the market. He remains confident in the sector due to its strong fundamentals, robust student demand, and structural supply-demand gap. Tang also sees the move into fee-based investment management as a natural progression in addition to the company’s current operating fee-based model, as it allows them to leverage their investment and asset management capabilities in the UK PBSA business.
CDL has also announced its foray into the UK PBSA market with the acquisition of a private rented sector project in Manchester for GBP75.6 million. With the launch of this new fund, Far East Orchard is well-positioned to tap into the growing market for PBSA in the UK.