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Cain and Fusion Students form PBSA JV with £1.5bn target

Cain International and student accommodation developer Fusion Students have established a joint venture to invest in purpose built student accommodation in UK university cities and plan plan to create a portfolio worth about £1.5 billion, comprising 7,500 to 10,000 beds.

Richard Pilkington.

The JV already has assets under exclusivity in Portsmouth, Liverpool, Manchester, Nottingham, Birmingham and London totalling over 3,000 beds, and plans to acquire more stock by forward funding and forward purchase of new schemes. The focus will be on the so-called Russell Group universities and London.

“The PBSA sector has proven robust over the course of the pandemic and with UCAS applications at an all-time high last year, this is only set to grow further as the value of a premium education retains its appeal,” said Cain International senior managing director Richard Pilkington, head of European real estate. “However, with increasingly stringent ESG criteria and expectations from students, we believe there is a significant opportunity to bring more high-quality products to an increasingly bifurcated and undersupplied market.”

Cain already has significant expertise in PBSA through its real estate debt team, which has provided close to £200 million for the development of  about 1,700 beds in Coventry, Cardiff, and Warwick.

The firm has additional exposure in the residential market with over 8,500 residential units completed or under development across global gateway cities including London, New York, Los Angeles and Miami.

Harris & Associates advised Fusion and Cushman & Wakefield advised Cain International.