Published: Nov 07, 2023
Focus:
Property
Maven and IPIM, a leading real estate fund manager, have purchased a 1,500 m2 site in Dundee and are set to redevelop it into a new £30 million purpose-built student accommodation (PBSA) complex.
The site has planning consent for a seven-storey, 189-studio bed project that will feature modern amenities including a ground floor student hub, gym, cinema room, dining room, and a landscaped external courtyard all built to high-end specifications and fitouts. Construction is planned to start in 2024 and is anticipated to complete by 2026. The PBSA scheme is intended to be built to “Very Good” BREAAM certification.
The development site is centrally located with frontage on Marketgait, a main artery that is just minutes walking distance away from Dundee city centre, University of Dundee, Abertay University, Dundee Rail station, Hampton by Hilton, Lidl grocery store, and neighbouring student accommodation.
The partnership will leverage both IPIM and Maven’s extensive experience in the PBSA sector where the pair has jointly developed / repositioned, asset managed, and operated eight properties across the UK totalling over 1,366 beds to date. On a cumulative basis, IPIM and Maven have developed 23 PBSA assets totalling 3,688 beds worth c. £446 million across the UK.
Maven has extensive experience in the Dundee market as the company acquired, redeveloped / refurbished, and sold Marketgait Apartments, a 116-studio bed PBSA scheme in 2018. Currently, Maven is overseeing the development of Hessian, a 152-studio bed PBSA project on Brown Street in the city centre.
There has been very little new build PBSA inventory in Dundee since 2015 over the last decade and according to Savills research, Dundee is one of the most under supplied markets in Scotland with only around 3,900 existing student beds relative to a student population of over 17,100. As such, c. 77% of the total full-time student population are not able to access purpose-built student beds based on the existing supply.
"Despite the macroeconomic environment, which is presenting some challenges to certain property sub sectors, UK PBSA continues to remain resilient, particularly where there are significant supply shortages such as that in Dundee. Coupled with rising student numbers and a falling provision of HMOs from private landlords due to increased regulation and tax changes, stock is being stretched and there remains attractive investment opportunities for quality projects.
Our latest PBSA development, in collaboration with IPIM, will deliver stylish student living in the heart of the city centre, close to a number of amenities and within walking distance to the University of Dundee and Abertay University campuses. We believe it will prove popular with both UK and international students.”
Paul Johnston, Partner at Maven
“We are delighted to have acquired Marketgait Dundee as the seed deal for our first UK PBSA-focused multi-asset fund. IPIM UK Student Living LP seeks to deploy c. £40m of investor equity to develop or reposition / refurbish student assets across the UK.
While there are some macroeconomic uncertainties ahead, we believe that the current point in the cycle presents a unique opportunity for investment. Higher interest rates and inflation continue to curb future UK PBSA development pipeline on the back of higher demand, exacerbating the bed shortfall. We believe that investing now, ahead of the rebound will be very lucrative for our fund once capital market conditions improve.”
Selina Williams, Executive Director at IPIM
