Singapore-based real estate company Far East Orchard has expanded its student accommodation portfolio in the United Kingdom with the acquisition of Emily Davies in Southampton, Southwest of London, for £13.9 million (approximately S$22.9 million).
The acquisition is expected to be completed in April 2023 and will grow the group’s total number of beds to more than 4,400 beds in the UK, bringing the group closer to its 5,000 beds target by 2025.
The 180-bed freehold student accommodation property in Southampton has undergone a refurbishment in 2021, with a newly added amenity block which includes facilities such as a gym, cinema room, games room, large open study space and a private dining room.
The property is within walking distance of three Solent University (SU) campuses, and adjacent to the Southampton Central Railway Station which connects to London within 90 minutes.
Commenting on the acquisition, Group Chief Executive Officer of Far East Orchard, Alan Tang said, “The acquisition is in line with the Group’s intent to grow our student accommodation portfolio as we continue to build our lodging portfolio to increase recurring and stabilised income. With the addition of Emily Davies, the near 100% occupancy rate of our overall portfolio for the current academic year 2022/23 underscores the resiliency of the UK student accommodation sector against the current economic backdrop.”
Tang added, “There is a favourable demand and supply imbalance of student accommodation in the UK with the return of international students following the lifting of travel restrictions, coupled with the projected domestic students’ growth over the next 10 years. Notwithstanding inflationary cost pressures amidst increasing energy prices and rising interest rates, we remain upbeat about the student
accommodation sector, which acts as an inflationary-hedged asset class. The proximity of Emily Davies to the city centre and both universities in Southampton is also an added advantage for the property to attract students, alongside strong rental growth.”