A new joint venture between Zenzic Capital and Torsion Group, announced yesterday, is seeking to address the continuing shortage of high-quality student accommodation in the UK by investing in existing stock and developing new assets.
Zenzic, a real estate credit and special situations investment manager, has launched a PBSA strategy with a target portfolio of over £500 million.
“The UK student accommodation sector is underpinned by a number of highly attractive tailwinds including growing student numbers, an acute shortage of high-quality supply and an inflation-protected income profile that enhances returns for our investors against a challenging wider macroeconomic backdrop,” said Nadine Buckland, CEO, Zenzic Capital.
The first step is the acquisition of five major schemes with a total GDV of over £147 million through the JV with Torsion Group, a Leeds-based residential developer, contractor and operator.
The five schemes, all in Russell Group university towns, will have a combined 817 beds and include en-suite bedrooms, social, fitness and wellbeing space, study zones and recreational areas. They will be operated by Torsion-owned Luna Students, a specialist operator.
Two of these schemes, which are located in Leeds and Nottingham, are newly built and already fully let. The other three are new developments in Warwick, Nottingham and Leeds, which are already under construction.
The three new developments will be delivered by Torsion in time for the start of the 2025/26 academic year. In line with both parties’ focus on ESG, sustainability is central to the design and construction of all five schemes, with the three new developments targeting a minimum BREEAM Very Good rating.
“We are actively taking measures to reduce our embodied carbon emissions on all our developments, because sustainability remains at the forefront of our strategy and decision-making as we look to play a leading role in delivering decarbonisation across the construction sector,” said Dan Spencer, CEO, Torsion Group.
The Zenzic/Torsion JV is targeting a total portfolio GDV of over £250 million across seven schemes and will deliver 1,566 rooms by the end of this year.
“We have already established a strong track record in the PBSA market, and this strategy enables us to increase our exposure to a sector that is one of our most compelling conviction calls,” said Buckland. “As part of this strategy, we look forward to building on our longstanding relationship with Torsion through this joint venture as we work together to deliver a best-in-class, sustainable product that meets the needs of modern students.”
Knight Frank estimates there are currently 95,000 new beds in the planning pipeline, significantly below the 263,000 additional full-time undergraduates anticipated between now and 2030.