uk student accommodation
TRANSCRIPT
Investment proposalInvestment proposal
Student Accommodation in the UK
June, 2011
Table of Contents
AXIO Capital 3 - 5
Student Accommodation Market Information 6 – 14
Current Projects 15 - 26
The Deal organization 27 The Deal organization 27
Exit Strategy 28
Contacts 29
AXIO Capital
June, 2011 2
AXIO Capital
June, 2011 3
AXIO Capital
AXIO Capital
� Investment company, which attracts and invests in various real estate projects in
Latvia and UK.
� More than 10 years of experience in the Latvian market and 4 years of experience in
the United Kingdom market.
� Andis Riekstins. Axio Capital founder. Before that he worked and formed Latvian
largest leasing company SIA Swedbank Līzings. Since 2002 works in private business,
fund raising and investment management. Attracted funding for implementation of
various projects more than 80 million EUR in Latvian and Russian markets. Has various projects more than 80 million EUR in Latvian and Russian markets. Has
experience with projects in sectors such as real estate, food processing, shipping,
airports, retail, etc.
� Juris Lujans. 8 years experience in the financial sector and six years experience in
real estate development. Was the chairman of Mortgage Bank of Latvia and the
Minister of Economics. Since 2003 was the founder and manager of Latvian largest
residential villages developer company, the realizing more than 300 private houses
building and selling process.
June, 2011 4
AXIO Capital
AXIO Capital partners and experience
AXIO Capital cooperation partners
� RE&RE. Second largest construction company in Latvia with annual turnover of EUR
80 million.
� Nordic Construction UK (50%) RE&RE. The activities was begun in UK in 2009 year.
ExperienceExperience
� More than 15 years experience of the construction in Latvia (www.rere.lv)
� Southampton. Two detached blocks of flats
� Construction of a leisure development in French Alps – 2 projects (40 residential
units)
� Exeter, Devon. 4 storey, 33 studio flats development
June, 2011 5
AXIO Capital
Student Accommodation
Market InformationMarket Information
June, 2011 6
AXIO Capital
UK market situation the Key Points
� UK higher education is No. 1 in the world
� Student growth is 5-8% in recent years
� Deficit of special purpose halls of residences is constant
� The existing halls of residences are full to 100%
� Average 30 - 50% of students live in inadequate accommodation
buildings
June, 2011 7
AXIO Capital
Universities in the UK
� Total number of Universities -
118
� Total number of Students - 2,49
million (2009-2010)
� London has 40 higher education
institutions and has a student
population of more than 400 000
� The maximum tuition fee
Rank Institution Total students
1 The Open University 209 705
2 University of Manchester 40 400
3 Manchester Metropolitan University 35 730
4 Sheffield Hallam University 35 410
5 University of Nottingham 34 120
6 University of Leeds 33 585
7 University of the West of England 32 840
8 University of Central Lancashire 32 295
TOP 20 UK universities by size (2009-2010)
� The maximum tuition fee
(students from UK and ES) a
university or college can charge
is:
£3290 for 2010-11
£3375 for 2011-12
£9000 for 2012-13
� Tuition fees for overseas students
– from £8750 (2009-10)
depending on the course
8 University of Central Lancashire 32 295
9 University of Plymouth 32 200
10 Northumbria University 31 425
11 University of Birmingham 30 125
12 Cardiff University 29 685
13 Teesside University 29 055
14 University of Warwick 28 870
15 University of Greenwich 28 805
16 Leeds Metropolitan University 27 865
17 University of East London 26 930
18 Liverpool John Moores University 25 860
19 University of the Arts London 25 750
20 London Metropolitan University 24 335
June, 2011 8
AXIO Capital
Rankings of Universities in the UK (2010)TOP 30
Rank Name Rank Name
1 Oxford University 16 Loughborough University
2 Cambridge University 17 King's College London, University of London
3Imperial College of Science, Technology &
Medicine 18 The University of Sheffield
4 University of St Andrews 19 Southampton University
5 London School of Economics and Political Science 20 The University of Nottingham
6 The University of Durham 21 Sussex University 6 The University of Durham 21 Sussex University
7 University College London 22 The University of Birmingham
8 University of Warwick 23 University of East Anglia
9 University of York 24 Glasgow University
10 Lancaster University 25 Newcastle University
11 Edinburgh University 26 Leeds University
12 Exeter University 27 School of Oriental and African Studies (SOAS)
13 The University of Bath 28 Liverpool University
14 University of Bristol 29 Aston University
15 Leicester University 30 The University of Manchester
June, 2011 9
AXIO Capital
The Student Accommodation in UKMarket Information
Demand
� The total number of people in higher education
has grown from 1.8 million in 1996-7 to
approaching 2.49 million in the academic year
2009-10.
� The majority of key university towns reported
nearly 100% occupancy for the last academic
Higher education student
population (million)
2,25
2,3
2,35
2,4
2,45
2,5
2,55
nearly 100% occupancy for the last academic
year, with private halls targeting affluent
domestic students, overseas students and
mature students, the latter two of which are
growing in number.
Rental growth is of 5% per annum over the last six years in the student accommodation
sector, compared to 0,6% for commercial property.
2,15
2,2
2,25
Source: Higher Education Statistics Agency
June, 2011 10
AXIO Capital
The Student Accommodation in UKMarket Information
Accommodation options
� Institution maintained property
� Private-sector halls
� Parental/Guardian home
� Own residence
� Other rented accommodation
Other
Approximate average costs for students
per year
Tuition fees £ 9 000
Accommodation £ 5 500
Living costs (food, bills etc.) £ 6 500
TOTAL £ 21 000
Supply
� The supply of privately run purpose built student accommodation continues to be
dominated by the largest four service providers – UNITE, UPP, Opal and Liberty
Living.
� Although there has been substantial development, existing supply levels still mean
the vast majority of students are not able to take the option of a privately operated
room. Only 26% of London’s higher education students are able to access halls, with
only 3% having access to private sector halls.
� Other TOTAL £ 21 000
June, 2011 11
AXIO Capital
University Partnership Programme (UPP)Market information
� University Partnerships Programme (UPP) is the UK’s leading provider of on-campus
managed university accommodation
� UPP specialises in establishing long-term partnerships with universities to fund,
develop and operate student accommodation. With more than a decade of
experience, UPP delivers risk-free property solutions which are fully funded by UPP
UPP is owned and actively supported by funds managed by Barclays Infrastructure� UPP is owned and actively supported by funds managed by Barclays Infrastructure
Funds, part of Barclays Capital
� 39 000 students in 126 properties across 33 towns and cities across the UK
June, 2011 12
AXIO Capital
DefinitionsMarket Information
Standard room – room without private bathrooms
En suite room – room with private bathrooms
Studio provide a modern approach to self contained accommodation where students
have their own facilities. The accommodation comprises a combined living and
bedroom area, en suite shower room and kitchen facilities.
Cluster Flat – apartment consists of standard rooms or en-suite rooms with sharedCluster Flat – apartment consists of standard rooms or en-suite rooms with shared
kitchen
Catered hall of Residence - Dining facilities are either in the Hall or in another Hall
close by and are canteen style service.
June, 2011 13
AXIO Capital
Links PageMarket information
� Unite Plcwww.unite-students.com/home
� UPP Limitedwww.upp-ltd.com/
� Opal Property Group Limited
http://opalstudents.com/http://opalstudents.com/
� Plymouth University (Accommodation)ww.plymouth.ac.uk/pages/view.asp?page=25302
� Exeter University (Accommodation)
http://www.exeter.ac.uk/accommodation/
� AXIO
http://www.axio.lv/
June, 2011 14
AXIO Capital
Current Projects
� St. Augustine’s Project in Plymouth
� Sidwell Street apartments in Exeter
June, 2011 15
AXIO Capital
Location
Plymouth
Exeter
June, 2011 16
AXIO Capital
St. Augustine’s Project in Plymouth
June, 2011 17
AXIO Capital
Project descriptionSt. Augustine’s Project in Plymouth
It is planed to develop fully equipped student accommodation for students of Plymouth
University with 84 studio rooms with internet access, bike storage and CCTV.
� Alexandra road, Plymouth
� 6 floor modern building
� Total space 2880 sq m
7 flats and 77 studio� 7 flats and 77 studio
� St. Augustine’s apartments are within 15 min walking distance of the University
� Letting period 43 or 51 weeks
Estimated price (equivalent market prices)
� Studio – 170 GBP– 190 GBP per week
� Flat – 120 GBP – 170 GBP per week
June, 2011 18
AXIO Capital
Market informationSt. Augustine’s Project in Plymouth
Accommodation options
� University allocated accommodation:
◦ University-managed hall of residence (are managed by UPPL) total number 6
(468 standard rooms, 1168 en-suite rooms, 122 large en-suite rooms and 14
studio rooms)
◦ University-allocated cluster flats (owned and managed by Unite plc) total
number 4 (108 standard rooms, 639 en-suite rooms, 14 studio rooms)
� University approved accommodation
� Agencies and Managing Agents
Current Uptake 100%
The University of Plymouth has over 30 000 students and an annual income of around
£160 million.
There remains a 40% shortfall of available accommodation for first-year students.
June, 2011 19
AXIO Capital
St. Augustine’s location
“St. Augustine”
Alexandra road,
Plymouth
All approved student
accommodation is within the
highlighted area, and is
therefore within walking
distance of the main campus.
June, 2011 20
AXIO Capital
Financial informationSt. Augustine’s Project in Plymouth
Total planed investments 4.2 m GBP
Land 0.6 m GBP
Construction 2.9 m GBP
Other 0.7 m GBP
Equity 1.28 m GBPEquity 1.28 m GBP
Construction period 12 months
Estimated sales price 5 m GBP
Sales period One year after construction
Estimated IRR 19%
June, 2011 21
AXIO Capital
Sidwell Street apartments in Exeter
June, 2011 22
AXIO Capital
It is planed to develop fully equipped student accommodation for students of Exeter
University with 96 rooms: 67 en suite rooms in cluster flats, 26 studio and 3 double
bed flats with internet access, cycles storage, Laundry and CCTV.
� Sidwell Street 69 - 73, next to the cinema Odeon, in the centre of Exeter
� The existing building will be demolished
� 6 floor modern building in the centre of Exeter
� 67 en suite, 3 flats and 26 studio
Project descriptionSidwell Street apartments in Exeter
� 67 en suite, 3 flats and 26 studio
� Retail area for rent on Ground Floor
� Sidwell Street is located midway between the Streatham Campus and St. Luke’s
Campus
� Letting period 43 or 51 weeks
Estimated price (equivalent market prices)
� En-suite room 140 GBP per week
� Studio 170 GBP – 190 GBP per week
� Flat 120 GBP – 170 GBP per week
June, 2011 23
AXIO Capital
Sidwell Street apartments Location
69 – 73 Sidwell
Street, Exeter
Sidwell Street 69 – 73 is
located midway between
the Streatham Campus
and St.Luke’s Campus
June, 2011 24
AXIO Capital
Market informationSidwell Street apartments in Exeter
University accommodation is accommodation owned, managed or approved by the
University of Exeter
� Catered Halls of Residence total number 5 (1423 single rooms and 117 twin
(shared) rooms)
� Self – Catering Residences total number 13 (1159 en-suite rooms, 1174 standard
rooms and 258 studios rooms)
Current Uptake 100%
UPP has entered into a long-term partnership with the University of Exeter to provide UPP has entered into a long-term partnership with the University of Exeter to provide
additional student accommodation on the university’s Streatham Campus. The three-
year construction project started in 2009. Investment - £130 million. Occupancy: 100%
at start of academic year 2009/2010.
UPP’s partnership with the University of Exeter involves the transfer of 980 rooms of
existing accommodation, of which 621 will be retained and operated by UPP Asset
Management. The remainder will be redeveloped to provide 1948 new en suite rooms,
built using UPP’s Eco Residence model.
The University of Exeter has 15 700 students and an annual income of around £227
million.
June, 2011 25
AXIO Capital
Financial informationSidwell Street apartments in Exeter
Total planed investments 6.9 m GBP
Land with existing building 2.5 m GBP
Construction 3.5 m GBP
Other 0.9 m GBP
Equity 3.4 m GBP
Construction period 12 months
Estimated sales price 8.4 m GBP
Sales period One year after construction
Estimated IRR 22%
June, 2011 26
AXIO Capital
The Deal organization
June, 2011 27
AXIO Capital
Exit Strategy
� After construction to sell to operator
◦ UNITE
◦ UPP
◦ Opal
◦ Liberty Living etc.◦ Liberty Living etc.
� After construction to sell to financial investor
◦ Investment funds
◦ Pension funds etc.
� After construction to operate from 1 to 2 years, to get rental income and then to sell
June, 2011 28
AXIO Capital
Contacts
Andis Riekstins
� phone: +371 29 455 355
AXIO Capital UK Ltd.
� London, 37 Knox rd, GU2 9AH, Guildford, Surrey
� phone: +44(0) 07515253095, fax: +44(0) 1483243501 � phone: +44(0) 07515253095, fax: +44(0) 1483243501
e-mail: [email protected] / [email protected]
SIA AXIO Capital
� Mārupes nov., Mārupe, Kārļa Ulmaņa gatve 119, LV-2167, Latvija
� phone.: +371 67 244 122, fax: +371 67 504 614
e-mail: [email protected]
� www.axiocapital.eu
June, 2011 29
AXIO Capital