ENBD Reit buys Dubai’s first pur­pose-built stu­dent block

Nasdaq-listed fund ac­quires Aca­demic City’s Uninest block

The National - News - Business - - The Region - Michael Fahy mfahy@thena­tional.ae

A real es­tate in­vest­ment trust (Reit) has bought the UAE’s first pur­pose-built stu­dent ac­com­mo­da­tion (PBSA) block in a deal worth Dh120 mil­lion.

ENBD Reit, which was launched by Emi­rates NBD and listed on Nasdaq Dubai in March, said it had ac­quired the Uninest block in Dubai Aca­demic City un­der a sale and lease­back agree­ment with the build­ing’s de­vel­oper and op­er­a­tor, Dubai-based Global Stu­dent Ac­com­mo­da­tion (GSA). It has signed a seven-year lease on the build­ing.

Uninest Dubai­land opened its doors last year and is the first of sev­eral PBSA blocks that GSA is look­ing to de­velop in the re­gion.

It is a 160,000 square feet build­ing with 242 rooms with 424 beds on nine up­per floors. There is also a gym, en­ter­tain­ment room, cinema room, study area, a cafe and a rooftop pool. Tim Rose, the head of Real Es­tate at Emi­rates NBD As­set Man­age­ment, said: “This is an im­por­tant step in our cap­i­tal de­ploy­ment pro­gramme and a key mile­stone for the process of di­ver­si­fy­ing our port­fo­lio be­yond tra­di­tional as­set classes. As GSA plans to grow its pres­ence in Dubai and the UAE, we are look­ing for­ward to a strate­gic part­ner­ship that will al­low both par­ties to sup­port the growth of the Emi­rates’ education sec­tor.” Fol­low­ing its deal, ENBD Reit now has a to­tal value of US$349m, and a net as­set value of $297m. Its port­fo­lio also in­cludes four of­fice tow­ers (Al Thu­raya 1 in Dubai Me­dia City, Burj Daman in DIFC and two build­ings in Dubai Health­care City) and three res­i­den­tial tow­ers, with oc­cu­pancy rates at 86 per cent.

GSA is head­quar­tered in Dubai but has stu­dent prop­er­ties in Aus­tralia, China, Ger­many, Ire­land, Ja­pan, the UAE and the UK.

The mar­ket for pur­pose-built stu­dent ac­com­mo­da­tion has de­vel­oped into a ma­jor as­set class over the past 20 years. Its devel­op­ment has been most prom­i­nent in the UK, but its for­tunes took a bat­ter­ing in this mar­ket last year due to the un­cer­tainty sur­round­ing Brexit – not only in terms of its ef­fect on prop­erty val­ues but also on the po­ten­tial for greater re­stric­tions to be placed on over­seas stu­dent num­bers.

A study pub­lished ear­lier this month by Sav­ills said that the value of stu­dent homes traded in the UK dropped by 24 per cent last year to £4.5 bil­lion (Dh21.2bn) from a record £5.9bn in 2015. How­ever, the mar­ket is ex­pected to re­cover this year, with Sav­ills fore­cast­ing an 18 per cent growth in in­vest­ment num­bers to £5.3bn.

Of the £4.5bn in­vested last year, 60 per cent came from out­side the UK. Al­most £1.4bn was in­vested from North Amer­ica, nearly £1.2bn came from Asia and £300m came from the Mid­dle East. More than half of the Asian in­vest­ment was made via Sin­ga­pore-based sovereign wealth fund GIC through a joint ven­ture with GSA.

Paul Tostevin, an as­so­ciate direc­tor in Sav­ills’ re­search di­vi­sion, said: “GIC’s £700m in­vest­ment in UK stu­dent hous­ing is a vote of con­fi­dence in the sec­tor from one of its most ex­pe­ri­enced investors.”

The mar­ket for pur­pose­built stu­dent ac­com­mo­da­tion has de­vel­oped into a ma­jor as­set class

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