AXA IM Alts has announced that it has secured around €660m of additional capital commitments from a mix of new international institutional and sovereign wealth fund investors, for its European Student Accommodation Strategy (ESAS).
Subject to several conditions precedent mentioned below, this takes committed equity into the strategy to €1.3bn, as AXA IM Alts looks to increase investment into the high-growth European purpose-built student accommodation (PBSA) and co-living sectors.
The strategy has been seeded with AXA IM Alts’ The Boost Society (ex-KLEY Group) platform which comprises a fully integrated student housing and co-living operator and portfolio that was originally formed in October 2019 when AXA IM Alts acquired KLEY Group, a 2,900-bedroom fully integrated French student housing and co-living operator, on behalf of clients.
Since then, AXA IM Alts has grown the platform to become one of the leaders in the European PBSA and co-living space, with a high-quality portfolio of 8,300 beds across 32 operational residences in Spain and France, with strong ESG credentials.
“The €660m of third-party capital commitments we have raised from European and Asian Pension and Sovereign Wealth Funds for our European Student Accommodation Strategy (ESAS) reflect the quality of the seed portfolio and AXA IM Alts’ strong track record of acquiring, growing and managing alternative Real Estate platforms such as ESAS. This new capital will help drive our ambitions to grow ESAS into a c. €3bn PBSA and co-living platform by 2031.”
Florence Dard, Global Head of Client Group, AXA IM Alts
Highlights include an expansion into Spain in 2021, where it operates under the ‘KLEY’ and ‘Campus’ brands, as well as the launch of ‘Hife’, a French co-living residence brand for young workers in 2023. The wider platform was rebranded The Boost Society in 2023. The new capital commitments and seed portfolio transaction are subject to a number of standard applicable conditions precedent, including a works council social consultation process.
The new capital partners are to invest alongside the original investors, who will retain a majority stake in the portfolio once the transaction completes. AXA IM Alts has strong ambitions to continue to grow the platform and strengthen its leadership position in its markets of operation. To achieve this, AXA IM Alts aims to leverage its global operational real estate platform, which benefits from a fully integrated internalised model with established deal sourcing, asset management and development capabilities across Europe.
An additional 3,900 beds are planned to be delivered across a secured, ten-asset development pipeline that is set to increase The Boost Society Platform portfolio to nearly 12,000 beds by 2028. AXA IM Alts has also identified further additional opportunities to help grow the platform.
ESAS will seek to acquire a mix of standing assets, ground up developments and former-office conversion opportunities, through both asset and platform investments. It will target further growth in its existing markets, and France in particular, while continuing to look at opportunities in core European cities, characterised by a critical shortage of high-quality accommodation relative to rising demand from students and young professionals. This plan will support AXA IM Alts’ ambitions of building ESAS into a €3bn PBSA and co-living portfolio by 2031.
The European PBSA sector is characterised by a significant undersupply of modern, fit-for-purpose student housing in cities anchored by renowned educational institutions, with a 1.2 million bed PBSA shortfall across Europe’s leading cities.
Over the past decade, the number of higher education students in continental Europe and the UK has increased by 15% and is projected to grow by a further 10% by 2030/31, while the delivery of new stock remains constrained by a shortage of well-located sites and nuanced regulatory environment across the continent.
“The European student housing market continues to benefit from a number of structural demographic and societal tailwinds, which have underpinned its resilience during the recent period of economic volatility.
“Having proven the ESAS concept by establishing The Boost Society as a leading, high-quality multi-branded student and co-living portfolio since acquiring KLEY in 2019, it is a natural next step to bring in third party capital to accelerate the platform’s growth and capitalise on the sector’s compelling fundamentals.”
Timothee Rauly, Global Co-Head of Real Estate, AXA IM Alts
