IP Investment Management and Maven Capital Partners collaborate to address student housing shortage in Dundee

06/11/2023
Photo by CHUTTERSNAP on Unsplash

LEADING residential living-focused real estate investment manager, IP Investment Management (IPIM), in partnership with Maven Capital Partners, a prominent property and private equity manager, has made a significant stride in tackling the student housing shortage in Dundee, Scotland. The collaboration has resulted in the acquisition of a prime student accommodation development site in the heart of Dundee, marking their maiden purpose-built student accommodation (PBSA) venture in the city.

The 1,500 m2 site, purchased by IPIM with Maven as the asset manager in early August 2023, was previously occupied by a petrol station. The ambitious plan involves demolishing the existing structure and redeveloping the area into a state-of-the-art PBSA scheme, with an estimated value of approximately £30 million. The development will consist of a seven-storey building comprising 189 studio beds, equipped with modern amenities such as a ground floor student hub, gym, cinema room, dining area, and a landscaped external courtyard, all designed to high-end specifications. Construction is slated to commence in 2024, with completion anticipated by 2026. The project is aimed at achieving a “Very Good” BREAAM certification, emphasising its commitment to sustainability and environmental responsibility.

This strategic investment comes at a crucial time for Dundee, where the demand for purpose-built student accommodations has far exceeded the supply. According to Savills research, Dundee is one of the most undersupplied markets in Scotland, with only around 3,900 existing student beds catering to a student population of over 17,100. Consequently, approximately 77% of the total full-time student population in the city lacks access to purpose-built student accommodations due to the existing supply shortfall.

Paul Johnston, Partner at Maven, highlighted the resilience of the UK PBSA sector, emphasising the attractiveness of investing in quality projects, especially in areas like Dundee, facing significant supply shortages. He stated, “Our latest PBSA development, in collaboration with IPIM, will deliver stylish student living in the heart of the city centre, close to numerous amenities and within walking distance to the University of Dundee and Abertay University campuses. We believe it will prove popular with both UK and international students.”

Selina Williams, Executive Director at IPIM, expressed the company’s excitement about the acquisition, marking the seed deal for their first UK PBSA-focused multi-asset fund. She explained, “While there are some macroeconomic uncertainties ahead, we believe that the current point in the cycle presents a unique opportunity for investment. Higher interest rates and inflation continue to curb future UK PBSA development pipeline on the back of higher demand, exacerbating the bed shortfall. We believe that investing now, ahead of the rebound, will be very lucrative for our fund once capital market conditions improve.”

The collaboration between IP Investment Management and Maven Capital Partners signifies a crucial step toward addressing the growing demand for high-quality student accommodations in Dundee, paving the way for a more comfortable and enriching university experience for students in the city.

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