Gatehouse secures US student housing portfolio "Republic"
Gatehouse Bank net USD half billion in real estate for GCC investors
Gatehouse secures Class A student properties near major universities in Texas, USA
GCC investors gain 7.0% net cash yield return
The Kuwaiti Shariah-compliant wholesale bank, Gatehouse Bank (“Gatehouse”) based in London, has surpassed the USD half billion mark in real estate investment acquisitions, on behalf of its GCC investors. It has accomplished this feat after the acquisition of a multi-million dollar US student property portfolio, “The Republic at Denton” and “The Republic at Lubbock” in Texas, USA providing investors a net cash yield of 7.0% per annum and a projected IRR of 9.0% over a hold period of five years. The newly built, multi-million dollar developed properties were purchased in partnership with US-based advisory firm, The Scion Group.
Fahed Boodai, Chairman of the Board of Directors at Gatehouse Bank stated, “Gatehouse commands excellence in UK and US real estate market expertise, having succeeded in the development of more than half a billion in investment acquisitions on behalf of its Gulf clients in a two year period. Gatehouse continues to build a formidable track record, having carved out a niche for itself as a leader in the delivery of high-quality, long-income real estate transactions across the office, student and logistic sectors.
He added, “With the Republic properties, Gatehouse Bank is pleased to pass on strong returns from the portfolio’s performance to its investors. Recognising the importance of the student accommodation sector as an excellent asset class for investment, the Republic properties offer a viable alternative to the office sector, as a high performing asset class that has shown consistent rental growth and increasing capital values. ”
The newly built, multi-million dollar developed properties were purchased in partnership with US-based student housing specialty operator, The Scion Group LLC. The portfolio consists of two uniquely designed student housing communities, with a total of 343 individual cottage and town-home style units containing 1,345 beds, with occupancy stabilized at over 96%.
The Scion Group President, Robert Bronstein, stated that Scion was excited to add the properties to its portfolio, adding: “These acquisitions represent a great opportunity to fulfil several of our business goals at once: to continue owning and operating first-class student communities, to serve two growing campus markets in Texas, and to extend our partnership with Gatehouse Bank in owning high-quality assets producing reliable yield.”
Gatehouse Bank was assisted by Archstreet Capital Advisors and sister company, GSH in this transaction.
Excellion Capital acted for Gatehouse Bank, with GVA acting for the vendors, Cadena.
Known as The Lofts at Wolf Pen Creek, the uniquely designed 310,422 sq ft property comprises 265 one, two, three and four bedroom loft-style flats and townhouses containing 683 beds, distributed among several buildings, most of them connected to one another to form an upscale resort-style community. Amenities include a 13,600 sq ft clubhouse, a theatre with stadium seating; an internet café and media centre; a business/study centre; two swimming pools; and a 24-hour fitness centre.
The property is minutes away from Texas A&M University, which is one of the largest in the United States. The Southwest and Southeast regions together account for almost 32% of all U.S. student enrolments and are one of the fastest growing regions nationwide. As a result, there is a significant demand for living space. Last year in the U.S. transaction volume in the student housing sector increased 250% in comparison to 2009 levels and there is a very real opportunity for investors looking to tap into this yield-generating growth sector.
To meet continuing demand for high quality real estate prospects, Gatehouse provides leading advice and opportunities, as well as detailed research and sector analysis, to investors across major international markets including the UK, Europe, Asia and the US. This latest transaction follows the acquisition of two earlier student accommodation properties in the UK, and brings the total value of Gatehouse Bank’s global real estate portfolio to in excess of $370million.