Bouwfonds ESHF buys three student halls

Rabobank subsidiary has spent €68.7 million on its first three buys for student housing debt fund.

Bouwfonds Investment Management, part of the Dutch Rabo Real Estate Group, has acquired its first three student residences for its Bouwfonds European Student Housing Fund, as announced in a statement on Wednesday.

The investments total €68.7 million and were made in the UK, Germany and the Netherlands.

In the UK, the fund acquired the former Gateway Theatre scheme in Edinburgh, a 140 apartment complex for €20.4 million, which was sold by a joint venture partner from London, Cornwall Property Partners and Kitty Hawk Capital Partners.

In the Netherlands, an Amsterdam office building which will be converted to student housing over the course of a year, was bought for €26 million. The property is set to consist of 354 studios.

And in Germany, a property in Dresden, still under construction and due for completion in autumn 2014, was acquired for €22.3 million.

Bouwfonds European Student Housing Fund was launched in April 2013 in response to the sustained quantitative and qualitative shortage of student halls of residence in Europe, the firm has said. It will be placed with German institutional investors and focuses on major European university towns and cities in Germany, France, the UK, the Netherlands and Scandinavia.

The fund is targeting €200 to €300 million of investment and has already had a first close. It offers investors a rate of return of 5.5 percent to 6.5 percent and has a maximum leverage of 40 percent.

Xavier Jongen, fund director of Bouwfonds European Residential Funds said: “We see strong interest in student housing and our first acquisitions and pipeline of investments show that we bring our customers good quality stock in those pan-European markets where the academic ranking is high and the total education costs over the full cycle – expressed in housing costs and academic fees – are low, in line with our investment strategy.”