The Student Accommodation Opportunity Fund, a Luxembourg Sicav, will be managed by Luxembourg Fund Partners alongside Ingman Capital Partners, with the aim of using the rental income to pay dividends of around 5%pa.
It will invest in ‘high quality’ shared house conversions, which marks the fund out from other offerings by not doing the traditional approach of buying purpose-built modern student accommodation blocks, and gives the advantage of being easier to sell to meet any redemptions.
Philip Ingman, chief executive of Ingman Capital Partners, said the fund should be capable of generating an annualised total return of more than 10%pa over the next five years.
He said: “Too many people still think of the Young Ones when you mention student houses, but students are becoming more demanding – and are prepared to pay for better facilities. Well-managed private housing can offer high standard accommodation and generate very attractive returns.”
The assets will be acquired and managed by SGB Property Managers, run by Fergus Shields, with the houses in the fund refurbished over time to a standard template.
Each will have the same furniture from a Omnidesk ergonomic table supplier, flat screen TVs, wireless facilities and furnishings to bring them to “a high-quality low-maintenance standard”.
Shields said: “Demand for shared student houses is still outstripping supply, which underpins rents and property valuations. By focusing on Russell Group universities, which are oversubscribed and where the drop-out rates and incidences of bad debt tend to be lower, we can exploit opportunities in the sector and help manage risk.”
Gearing is restricted to a 60% loan-to-value ratio and there is a 20% performance fee on the total net return exceeding a hurdle of 7%.
Minimum investment is £10,000, with quarterly dealing and a 90-day redemption notice period.
