Mumtalakat and Investcorp explore UK student housing partnership
Bahrain’s sovereign wealth fund, Mumtalakat, and global investment firm Investcorp are considering a partnership to invest in and manage student housing assets in the United Kingdom.
The two companies have an established presence in the UK and Bahrain, and they believe that a joint platform would be well-positioned to capitalise on the growing demand for student housing in the UK.
The announcement is part of a series of initiatives led by His Royal Highness Prince Salman bin Hamad Al Khalifa, Crown Prince and Prime Minister, who is currently on an official visit to the UK, to strengthen business ties between the two countries.
Under the potential initiative, Mumtalakat and Investcorp would look to jointly own a student housing-focused operating platform created by Investcorp, which manages $50 billion in assets globally.
The platform, which manages the refurbishment and leasing of Investcorp’s Houses in Multiple Occupation (HMO) assets in the UK and helps with their acquisition and underwriting, currently manages a portfolio of approximately 1,200 beds across Nottingham, Bristol, Exeter and Leeds.
Anticipating growing demand for housing from both domestic and international students in the UK, the platform’s ambition is to acquire an additional 700-1,000 beds annually over the next several years, growing into one of the largest operators of HMO student housing in the UK over time.
An HMO is a property rented out by at least three people who are not from one ‘household’ (for example a family) but share facilities like the bathroom and kitchen. It’s sometimes called a ‘house share’.
In the UK, HMOs that are rented out to students are subject to different regulations than HMOs that are rented out to other tenants. For example, student HMOs must have a fire alarm system and a minimum number of fire exits. They must also have smoke detectors in every bedroom and common area.
Student HMOs are a popular option for students because they can be more affordable than student halls of residence. They also offer more independence and flexibility than halls of residence.
Commenting on the plans, Mumtalakat chief executive Shaikh Abdulla bin Khalifa Al Khalifa said: “We continue to explore investment opportunities that will add value and grow our portfolio through strategic partnerships. By joining hands with Investcorp, we believe that we would be able to further establish a best-in-class investment platform that focuses on fulfilling the increasing demand in the UK for student housing.”
A white paper by Investcorp last November outlined significant investment opportunities in the UK student accommodation sector.
The number of full-time university students in the UK has been growing steadily in recent years, it said.
In the 2021-22 academic year, there were 2.2 million full-time students, an increase of 4.2 per cent from the previous year.
The paper attributed the growth to a number of factors, including a favourable demographic outlook, increased international demand, and a higher participation rate among UK students.
Approximately 75pc of full-time university students in the UK require rental accommodation, it added.
As per statistics available on Studying-in-uk.org, the total number of international students in the UK was 679,970 as of 2021-2022.
According to the British Embassy in Bahrain, there were 1,450 Bahraini students enrolled in UK universities for higher education in the 2021/22 academic year.
Investcorp’s co-chief executive Rishi Kapoor said: “We believe that there is a shortage of well-managed, well-maintained, and affordable student HMO assets in major UK university cities.
“Our platform seeks to provide a best-in-class service which benefits the students, parents, the university ecosystem and the towns and cities where we have assets, and we believe that it could be further enhanced by a potential partnership with Mumtalakat. A major component of our investment thesis is a significant upgrade of the asset fabric and improving on the environmental, social, governance (ESG) credentials of the assets.”
