CLEMSON, SC – Arcapita Group Holdings, the global alternative investment company, announced the acquisition of Clemson Lofts, a student residence at Clemson University in South Carolina, USA. The acquisition is the latest addition to Arcapita's growing student housing portfolio following the acquisition of Quarry Trail, a student housing property at the University of Tennessee, early last year. These acquisitions represent a combined transaction value of approximately $ 120 million and will bring approximately 1,500 student residences to Arcapita.
Clemson Lofts is a 640 bed student residence located approximately 1 mile from Clemson University, the second largest university in South Carolina and one of the top 30 public universities in the United States. Due to its attractive location and affordable rents, the property has had an average occupancy of 99% over the past five years and is currently 100% occupied. Arcapita completed a similar acquisition in January 2020 when it acquired Quarry Trail, a stabilized 840-bed student housing portfolio for the University of Tennessee at Knoxville, the largest university in the state of Tennessee and a member of the Power Five sports conference.
Arcapita believes that the U.S. student housing market for well-located properties serving large public universities is seeing healthy growth due to cheaper levels of study, stable enrollment, and limited supply of vacant land in close proximity to campus. In addition, the US student housing industry has proven to be recession-resistant in the past as it experienced sustained and high occupancy during the economic downturn. College enrollment has grown over the past three recessions in the US, in part due to the lower opportunity cost of going to college when job prospects are less attractive.
Dedicated student housing for Level 1 public universities has also proven resilient during the COVID-19 pandemic. Students generally preferred to stay on campus even though classes have moved online, and this has allowed properties to maintain their pre-COVID occupancy and increase rental income. In addition, garden objects such as those acquired by Arcapita are likely to help facilitate social distancing measures, as there are no closed hallways, access to residential units is outdoors and each resident has their own bathroom.
Brian Hebb, Managing Director of Arcapita, commented, "These acquisitions mark our foray into US student housing – a rental housing sub-sector with great potential. We are targeting assets that serve major public universities with more than 10,000 student enrollments. 3 Miles from campus. Such properties are generally in the mid-market segment and have shown some student acceptance for their value for money. The demand for purpose-built student housing has increased in recent years due to the provision of amenities provided by Students are valued, such as direct shuttle service to campus, group study facilities and activity centers.Dedicated student housing currently accounts for less than 25% of the total student housing market and we expect this ratio will increase over time, around to meet the changing preferences of students. "
Martin Tan, Chief Investment Officer at Arcapita, commented, "Our student housing investments are another extension of our focus on defensive sectors supported by long-term trends. With over 20 million university students and less than one million dedicated student dormitories, the US American student housing industry is in the early stages of supply and has the potential for significant growth. We look forward to working closely with our operational partners to build a sizable and diversified student housing portfolio in the United States. "
Source: Arcapita Group Holdings