Former Valad director Paul Oliver is launching a fund to support student housing development in the UK. Curlew Student Trust has £40m of seed capital from investor clients of CBRE Global Multi Manager.
Oliver has bought three schemes being built by student accommodation developer Watkins Jones, in Sheffield, Swansea and Birmingham, with 1,091 beds. The balance of the £63m development cost will be funded with a £23m, five-year loan from RBS International, the bank’s Jersey-based offshore arm.
Oliver said the cost of debt was “better than the 5.25% in our model” and the fund would make “value-added returns of over 10%” through forward-funding. He developed the strategy at Teesland – later sold to Valad – for the University Capital Trust fund in 2004, which also backed Watkins Jones.
Fresh Student Living will be the fund’s operations and property manager. CBRE GMM has set up several specialist funds or joint ventures for its clients, including two with Ardstone Capital to buy in the UK regions and Ireland. “CBRE GMM had a really good look at the sector and decided it liked this route and brand new stock,” Oliver said.