Resilience of US student housing market sees GSA acquiring assets spread over 19 cities in 18 states

Name: US colleges face US$15 billion hit as Chinese students stay away amid coronavirus pandemic
Uploaded: 2021-02-02T02:00:14.000Z
Duration: 1 min 25 s
Description: US colleges face US$15 billion hit as Chinese students stay away amid coronavirus pandemic

Undeterred by the pandemic, GSA acquires property from UCAL, a joint venture between University Communities and the California State Teachers Retirement Fund

Investing in purpose built student accommodation is risky in the near term as conditions are likely to remain challenging, says analyst

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There were 19.7 million college and university students in the US as of the fall semester last year. (Above) students on the campus of UCLA in Los Angeles. Photo: AFP

Cheryl Arcibal

Published: 10:00am, 2 Feb 2021Updated: 10:00am, 2 Feb 2021

Student accommodation may have been badly affected by the coronavirus pandemic as universities switched to classes online due to coronavirus restrictions, but that has not stopped deal making in the segment, with one investor acquiring major assets in the US.

Last month, Global Student Accommodation Group (GSA), which specialises in purpose built student accommodation, bought 27 properties in the US, adding 8,000 beds across 19 cities and 18 states. The property was acquired from UCAL, a joint venture between University Communities and the California State Teachers Retirement Fund.

The transaction, whose value has not been disclosed, marked GSA’s entry into the US following properties in Australia, the United Arab Emirates, Germany, Ireland, Japan and Spain.

“In the next 18 months, including this transaction, we anticipate building a US portfolio of US$1.5 billion to US$2 billion,” said Will Rowson, chief executive of GSA Investment Management. “It’s the first time that we are moving into the world’s largest student housing market and we believe it is the first time an international owner and operator has moved into the US market.”

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US colleges face US$15 billion hit as Chinese students stay away amid coronavirus pandemic

One market observer, however, cautioned against investing in purpose built student accommodation as conditions are likely to remain challenging, at least in the near term.

Student accommodation that is highly dependent on foreign students will have to contend not only with the situation of their home market, but also the economic performance and geopolitical issues with the countries of their target students, according to Richard van den Berg, a Singapore-based fund manager at M&G Real Estate, part of a UK-based group with about £271 billion (US$371 billion) of assets globally.