Gatehouse student accommodation portfolio shows impressive growth
GCC Investors gain on investment outperformance with 9.7% cash yield
Kuwait City, Kuwait: London-based wholesale Shariah compliant bank, Gatehouse Bank plc, a subsidiary of The Securities House Group (Kuwait), has delivered an additional windfall for its investors, after successfully completing The Watkin Jones portfolio in the United Kingdom (UK) for £30 million, in April 2010. The two student accommodation properties located in Loughborough and Liverpool, UK have achieved the maximum 5% rental increase against a forecast 3.5% increase, at the recent annual rent review. Kuwaiti investors in the transaction have benefitted from the outperformance with a higher dividend of 9.7% cash yield return.
Richard Thomas, Chief Executive at Gatehouse Bank stated, "Gatehouse Bank is pleased to pass on the achievements from the portfolio's performance to our investors. Recognising the importance of the student accommodation sector as an excellent asset class for investment, Gatehouse has carved out a niche for itself in the UK real estate investment sector.
He added, "With more than £200million in Real Estate acquisitions in the last 18months, Gatehouse continues to build a formidable track record. With a base in London, the Gatehouse team offers unrivalled expertise and knowledge of UK market fundamentals to enrich the investment offering. As a result GCC investors have been rewarded with consistently strong distributions from long-income type transactions in a quality-end investment product."
Philip Churchill, Executive Vice President, Head of Real Estate at Gatehouse Bank commented, "Purpose-built student accommodation is an established real estate sector worth £6.5 billion in the UK alone, with universities in the UK typically witnessing student numbers forecast to rise at 10 times the rate of new accommodation that is being completed."
According to analysis by global real estate agents Knight Frank, student applications for university rose by 34% in the last 5 years in the UK, with student accommodation in short supply and under pressure to meet growth. Changes to government policy for higher education will increasingly drive universities to view options that will maximise revenues through disposal of their property to the private sector at improved values.
Churchill continued, "As a high performing asset class that is created from the imbalance between supply and demand in the market, the student accommodation sector presents a strong investment option for GCC-based investors looking to tap into the UK real estate market. A viable alternative to the office sector, it is a high performing asset class that has shown consistent rental growth and increasing capital values."
According to research the UK remains a top destination for a university education, with international applications by the next generation of global wealth leaders dominated by European, Far Eastern and Middle Eastern students.
"Investment in student accommodations should not be missed by GCC investors. It is an asset of choice that is well understood by Shariah investors and they should move quickly based on the demonstrated returns delivered from such investments, concluded Churchill.
Gatehouse continues to register a strong level of inquiry about opportunities in the student accommodation sector and is pleased to provide key investment opportunities to the GCC market.
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Gatehouse Bank
Gatehouse Bank operates as a Shariah-compliant wholesale investment bank based in the City of London focusing on: Islamic Capital Markets, Real Estate, Asset Finance; Treasury products and Shariah advisory services. For more information please visit our website www.gatehousebank.com
For more information, please contact
Amna Al Jarery/ Sara Al Saleh
Action Kuwait
+965 2491 5616/ +965 9737 5161
Amna.j@actionprgroup.com
© Press Release 2011
