KKR and Round Hill Capital Joint Venture Acquires Four Student Housing Developments in the UK

KKR, a leading global investment firm, and Round Hill Capital (“Round Hill”), a leading real estate investment, development and asset management firm, announce that their joint venture (the “JV”) is forward funding the development of four purpose-built student accommodation (“PBSA”) schemes across the UK. As part of the transaction, the JV has also exchanged an option agreement to forward-fund a 348 bed PBSA scheme in Bristol conditional on full planning consent.

The four PBSA development schemes are being acquired from and built by Watkin Jones plc (AIM: WJG) and will provide much-needed accommodation for students by delivering a combined total of 1,815 beds.

This is KKR and Round Hill’s first student housing transaction through their joint venture in the UK. This follows the JV’s acquisition in July 2018 of a significant housing development in Utrecht comprising 577 student beds and 173 residential apartments and in September 2018 of a 698 bed PBSA development site in Groningen, both in the Netherlands. KKR and Round Hill continue to look to make further investments in student accommodation through multiple strategies including acquiring existing assets, developing new PBSA, forward-funding and repositioning assets across select university towns and cities in the UK, Spain, Netherlands, and wider Europe.

The PBSA development schemes are strategically located in four key university cities throughout the UK with strong and increasing demand for high quality, well-located student housing, driven by persisting structural supply constraints, and these schemes will help to meet this growing demand. These high specification schemes will be configured predominately in cluster flats with some studios and comprise dedicated common areas and amenities for all residents to enjoy.

• Coventry: 778 beds across 17 storeys on Whitefriars Lane, adjacent to the Coventry University campus and in close proximity to the city centre. To be complete in time for the 2020/21 academic year.
• Glasgow: 401-beds across eight storeys on Kyle Street very close to the city centre and Glasgow Caledonian University and the University of Strathclyde. To be complete in time for the 2019/20 academic year.
• London (two schemes): 353 beds across nine and 17 storeys on Forest Road, Walthamstow adjacent to the Blackhorse Road Underground and Overground station. 283 beds across 17 storeys on Albion Way, a few minutes’ walk to Wembley Park Underground. Both have excellent transport links to higher education establishments, retail and cultural amenities across London. Both to be complete in time for the 2020/21 academic year.

The buildings will be managed by Nido Student, Round Hill’s established operational platform and brand for European student accommodation. Nido Student provides a home, lifestyle and experience which both inspires students and helps to build a real community.

KKR and Round Hill have secured financing for the schemes from Wells Fargo.

KKR’s investment was made through its Real Estate Partners Europe fund.

Commenting on the acquisition, Michael Bickford, founder and CEO of Round Hill Capital, said:

“Round Hill has a long-established track record of successfully investing and developing as well as asset managing student and wider residential real estate in Europe, and currently operates circa 65,000 accommodation beds in eight European countries. We are also funding a pipeline of over 9,800 student accommodation beds across the UK, Ireland, the Netherlands, Portugal and Spain.

This is our joint ventures’ first student housing development scheme in the UK, where select areas of the UK student housing market still suffer from structural supply constraints in key university cities. Taken together with the sector’s growing demand for high specification and well-located PBSA and our proven Nido brand and operating expertise, we are continuing to expand further in line with our existing growth strategy in the UK and wider Europe, helping to alleviate housing pressures.”

Seb d’Avanzo, Director at KKR, commented:

“We are delighted to have completed our first investment in the UK student housing sector, a market where the fundamentals and future growth drivers remain strong. These are high-quality developments in excellent locations. KKR’s European real estate platform has a successful track record in executing partnership deals, and we look forward to working closely with Round Hill to expand further our footprint in student accommodation in select European markets.”

Brian Welsh, Chief Executive of Nido, commented:

“We are pleased to acquire this fantastic UK student housing portfolio as we continue to further grow our strong pipeline of attractive potential investments in the UK and across wider Europe. We are accelerating our expansion and look forward to making Round Hill one of the largest global developers and operators of student accommodation, supported by Nido Student, our well-established student management platform.

Following significant recent research and analysis of today’s student, our Nido Student brand and offering has evolved to reflect the needs and ambitions of today’s students so that we are delivering a more complete and inspirational student experience across a wider variety of room types and rates to suit a broader spectrum of budgets and tastes.”

About KKR

KKR is a leading global investment firm that manages multiple alternative asset classes, including private equity, energy, infrastructure, real estate and credit, with strategic manager partnerships that manage hedge funds. KKR aims to generate attractive investment returns for its fund investors by following a patient and disciplined investment approach, employing world-class people, and driving growth and value creation with KKR portfolio companies. KKR invests its own capital alongside the capital it manages for fund investors and provides financing solutions and investment opportunities through its capital markets business. References to KKR’s investments may include the activities of its sponsored funds. For additional information about KKR & Co. Inc. (NYSE:KKR), please visit KKR’s website at www.kkr.com and on Twitter @KKR_Co.

About Round Hill Capital:

Round Hill Capital is a leading global specialist real estate investment, development and asset management firm. Round Hill Capital has a long and proven reputation for successfully identifying and acquiring high quality real estate investments.

Round Hill Capital is a highly focused investor and is experienced in establishing and running first class operating companies, having invested more than €7 billion of capital in real estate assets since its inception in 2002.

Round Hill has a successful track record of investing in and operating residential and student accommodation assets across Europe. The Group has acquired, built and managed over 110,000 residential units and student housing beds in recent years and currently manages circa 65,000 residential units and student housing beds in eight European countries. Round Hill’s approach incorporates multiple strategies, including acquiring existing assets, developing new purpose-built assets, forward-funding and repositioning assets.

Round Hill Capital has an established track record of generating high risk adjusted returns and invests in and asset manages real estate with some of the world’s leading institutions and private investors.