Far East Orchard has launched its first student accommodation fund, the FE UK Student Accommodation Development Fund, marking a significant milestone for the Singapore-based company. The fund, which has secured its first close with GBP70 million (approximately $120.13 million) in commitments, aims to raise a total of GBP100 million. The fund is designed to capitalize on high-potential Purpose-Built Student Accommodation (PBSA) development projects in the UK, where there is a strong demand for student housing.
According to Far East Orchard, there is substantial interest in both college locations and student accommodation across the UK. Citing data from CBRE, the company highlights an existing shortage of 580,000 beds in the UK student accommodation market, underscoring the significant opportunity for growth in this sector.
Far East Orchard’s wholly-owned subsidiary, Far East Orchard Investments (UK) Pte Ltd, has committed GBP35 million of the GBP70 million raised thus far. The fund is currently seeded with a development site in Glasgow, Scotland, which was acquired in March. This site will be the location for a new 273-bed student accommodation project, marking the fund’s initial investment.
Alan Tang, Group Chief Executive Officer of Far East Orchard, expressed confidence in the UK PBSA sector, stating: “Having operated in the UK PBSA business since 2015, we have established a strong reputation in the market and remain confident in the sector given its solid fundamentals, robust student demand, and the structural supply-demand gap.”
This new fund follows Far East Orchard’s acquisition of a 49% stake in The Student Housing Company, one of the UK’s leading independent PBSA providers, which was announced in April. The company’s expansion into the fee-based investment management business is seen as a natural progression that aligns with its existing fee-based operational model and leverages its investment and asset management expertise in the UK PBSA sector.
Far East Orchard’s results for the first half of FY2024, which ended on June 30, showed that bookings for its UK PBSA assets for the academic year starting in September were approximately 92% full, reflecting the strong demand in this market.
According to the August 22 announcement, the fund will continue to target PBSA development opportunities across the UK, building on Far East Orchard’s established presence and track record in the sector.