Greystar acquires PBSA asset in Southampton

Capital House, Southampton
Greystar has acquired Capital House, a 423-bed purpose-built student accommodation (PBSA) asset.
The asset is strategically located in Southampton, a city characterised by an undersupply of student housing.
Capital House will operate under Greystar’s Canvas brand, with Greystar underwriting renovations to improve under-utilised amenity space.

London, 26 March 2023
– Greystar Real Estate Partners, LLC (“Greystar”), a global leader in the investment, development, and management of high-quality real estate, including rental housing, logistics, and life sciences, has agreed to acquire Capital House from Kier Property Developments Limited and Investec in an off-market opportunity, as part of its ongoing PBSA growth strategy in Europe. 

Capital House is ideally located close to Southampton’s two major universities, the University of Southampton and Solent University, and residents benefit from the proximity of the site to the city centre’s major amenities including West Quay Shopping Centre, Southampton Football Club’s St Mary’s Stadium, Southampton Marina and Hoglands Park.

The site was completed in 2018 by Kier Property Developments Limited as an office to PBSA conversion, to meet high demand for student housing in Southampton. One of the strongest leasing markets for 2023/24, early leasing for 24/25 indicates Southampton will continue this trend. The accommodation will use Greystar’s Canvas brand.

Ben Mowbray, Managing Director – UK Investment, Greystar
, said: “Capital House offers a very attractive rental proposition in a significantly undersupplied market, and we are confident that in the medium-term it will deliver an attractive yield. Drawing on our unparalleled understanding of how students want to live, we plan in the short term to renovate underutilised amenities at the site, creating additional purposeful space that will add value to residents – and bring the offering in line with and ultimately surpass nearby properties.”

Mark Allnutt, Executive Director - Europe, Greystar
, said: “The acquisition of Capital House will expand our existing footprint in Southampton, in addition to the Student Roost-operated Vincent Place and is a further demonstration of our long-term conviction in the UK PBSA market as an attractive investment destination. We have a strong track record of delivering high-quality student housing in the UK, and this acquisition marks the next step for our pan-European Canvas brand, which is focused on supporting residents during a significant period of their life by providing a safe and sustainable living environment.”

Since entering the UK PBSA market in 2013, Greystar has successfully grown its Chapter Living brand in London, built the Canvas brand in 2021, and part-owned IQ until 2020. In December 2022, Greystar completed the acquisition of Student Roost, the UK’s third largest PBSA accommodation provider, from one of Brookfield’s real estate private funds in a new joint venture. Greystar now has over 35,000 PBSA beds in the UK, a market underpinned by an imbalance in the supply of high-quality professionally managed student accommodation.

Knight Frank’s Student Property Team advised the Vendor on the deal.
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