US real estate giant invests £1bn in UK student accommodation

US property investment giant CA Ventures is planning to sink £1bn into the UK’s student residential market after it said it identified a shortfall in the supply of accommodation across the country.

As work was set to get underway on developments it is backing in Glasgow, Sheffield and Edinburgh, the Chicago-based group said it would invest £500m a year in the UK and Ireland for the next two years.

It also plans to pump £300m over the next two years into student accommodation markets in the Netherlands, Portugal, Spain and Italy.

CA Ventures is already a major player in the US student accommodation market, having delivered around 50,000 beds across the country.

The three schemes CA Ventures is throwing its weight behind in the UK, backed by PGIM Real Estate, will see 422 beds built on a development next to Strathclyde university in Glasgow, 250 beds next to Sheffield university and 216 to serve Edinburgh university and the city’s Napier university.

CA Ventures said estate agency Knight Frank’s 15% projected increase in student numbers and the country’s under-supply of suitable accommodation was the key factor in the group’s decision to launch into the UK.

Carlo Matta, head of the group’s European operation, said there was a “significant opportunity” in the UK, Ireland and continental Europe to deliver modern, high quality student living arrangements.

“Limited supply, increasing obsolescence of older product and growing university enrolment has created a very favourable supply and demand dynamic.

“Across commercial real estate product types, we feel that student accommodation offers some of the best risk-adjusted returns given the ability to satisfy demand from both domestic and international students,” Matta added.