Far East Orchard has launched its first private fund in Singapore, the FE UK Student Accommodation Development Fund (FESAD). The mainboard-listed company also announced the first close of £70m, along with the fund’s target aggregate commitment of £100m.
The FESAD will invest in purpose-built student accommodation (PBSA) development opportunities within the UK.
The fund is currently seeded with a development in Glasgow, which was acquired in March, where a 273-bedroom PBSA project will be constructed. The scheme will be delivered in partnership with Glasgow based developer Ambassador Group.
The fund will now target ‘high-potential’ PBSA development projects in the UK, says Far East Orchard, aligning with the Group’s (Far East Orchard and its subsidiaries) strategy to effectively deploy the committed capital raised.
Far East Orchard’s wholly-owned subsidiary, Far East Orchard Investments (UK) Pte Ltd, has committed £35m of the £70m committed by limited partners.
The fund has indicated there is high demand for both university places and student accommodation in the UK. Citing CBRE data, Far East Orchard says there is a current shortfall of 580,000 beds in the UK.
“The establishment of a UK PBSA private fund in Singapore marks a key cornerstone for the Group as we build a resilient lodging platform leveraging on our investment and asset management capabilities.
“Having been in the UK PBSA business since 2015, we have established a track record in the market and remain confident in the sector given its strong fundamentals, robust student demand, and structural supply-demand gap. We are heartened by our investor’s confidence in us, which has led to a promising first closing”.
Alan Tang, Group CEO, Far East Orchard
According to the Group’s half year 2024 results, reservations for its UK PBSA portfolio for the September 2024 academic year stood at around 92% – reflecting strong demand for PBSA.
The launch of the fund follows Far East Orchard’s acquisition of a 49% stake in Homes For Students, the UK’s largest independent PBSA operator, announced in April. This strengthens the Group’s position in the UK PBSA sector.
Far East Orchard can also progressively acquire the remaining 51% interest in Homes For Students in two stages. The first being in September 2025 and then November 2030, subject to terms and conditions.
“Moving into the fee-based investment management business is a natural progression in addition to our current operating fee-based model to leverage our investment and asset management capabilities in the PBSA business in the UK.”
Alan Tang, Group CEO, Far East Orchard
