The O’Flynn property group, which is led by Cork developer Michael O’Flynn, has agreed a £1 billion (€1.16 billion) joint venture in the UK that will deliver student accommodation and shared living units in a number of British cities.
The agreement involves funding from private-equity firm Partners Group and assets owned and operated by Host Student Housing Ltd and Tiger Developments, subsidiaries of the O’Flynn group.
The joint venture is seeded with two Host-owned operational purpose-built student accommodation (PBSA) assets in Leicester (129 units) and Colchester (252), a PBSA development project in Bournemouth (206)and a co-living development project in Guildford (301).
In addition, a pipeline of more than £250 million of PBSA developments has been identified, comprising more than 1,000 beds in the prime university markets of Manchester, Bristol, Edinburgh and Birmingham.
Partners and Host intend to expand the joint venture through further developments in the PBSA and co-living sectors, creating a portfolio with a gross development value of £1 billion.
Commenting on the deal, Michael O’Flynn, chairman and chief executive of the O’Flynn Group, said: “Our experience over 25 years in providing student accommodation in Ireland, the UK and across Europe will clearly benefit the joint venture. This is a unique opportunity, through Host, to collaborate with Partners Group in the development of PBSA and co-living projects. The scale of the joint venture will quickly position the JV as a leading player in a sector with significant growth potential.”
John Nesbitt, managing director at Host, said the two sides had a “shared ambition” to build a portfolio of top-quality projects in sectors that offer “strong sector fundamentals and growth”.
Rahul Ghai, managing director and co-head private real estate Europe at Partners Group, said a return to post-Covid “normality” and strong demand made the student accommodation sector in the UK an “attractive investment opportunity”.
“The sector ... benefits from long-term tailwinds, such as favourable population growth trends and rising enrolment rates, as well as the continued strength of the UK’s higher education offering globally. The JV has a robust pipeline, and we look forward to hosting students across some of the most dynamic cities in the country,” he said.
Listed on a stock market in Switzerland, Partners Group is a leading global private-equity firm. Since 1996 it has invested more than $170 billion in various transactions on behalf of its clients globally. The group had about $127 billion in assets under management at the end of last year.
Host (formerly Victoria Hall Management Ltd) and Tiger Developments are part of the O’ Flynn Group of companies. It has developed and acquired more than 10,000 beds and currently operates about 8,000 student beds across 28 sites in the UK, Ireland and Europe, undertaking the day-to-day management of the properties, as well as the marketing of accommodation and the recruitment of students.
While better known as a builder of new homes here, the O’Flynn Group has long experience in student accommodation in Ireland and Britain. The group was founded in 1978.