This investment proposal summarizes two student accommodation development projects in the UK. It outlines AXIO Capital's experience and current projects, including a 84-unit development near the University of Plymouth called St. Augustine's and a 96-unit project called Sidwell Street apartments near the University of Exeter. Both projects aim to take advantage of the growing student housing demand and shortage in their respective university towns. Financial projections estimate 19% and 22% returns for the Plymouth and Exeter developments respectively.
4. AXIO Capital
Investment company, which attracts and invests in various real estate projects in
Latvia and UK.
More than 10 years of experience in the Latvian market and 4 years of experience in
the United Kingdom market.
Andis Riekstins. Axio Capital founder. Before that he worked and formed Latvian
largest leasing company SIA Swedbank Līzings. Since 2002 works in private business,
fund raising and investment management. Attracted funding for implementation of
various projects more than 80 million EUR in Latvian and Russian markets. Has
experience with projects in sectors such as real estate, food processing, shipping,
airports, retail, etc.
Juris Lujans. 8 years experience in the financial sector and six years experience in
real estate development. Was the chairman of Mortgage Bank of Latvia and the
Minister of Economics. Since 2003 was the founder and manager of Latvian largest
residential villages developer company, the realizing more than 300 private houses
building and selling process.
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5. AXIO Capital partners and experience
AXIO Capital cooperation partners
RE&RE. Second largest construction company in Latvia with annual turnover of EUR
80 million.
Nordic Construction UK (50%) RE&RE. The activities was begun in UK in 2009 year.
Experience
More than 15 years experience of the construction in Latvia (www.rere.lv)
Southampton. Two detached blocks of flats
Construction of a leisure development in French Alps – 2 projects (40 residential
units)
Exeter, Devon. 4 storey, 33 studio flats development
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7. UK market situation the Key Points
UK higher education is No. 1 in the world
Student growth is 5-8% in recent years
Deficit of special purpose halls of residences is constant
The existing halls of residences are full to 100%
Average 30 - 50% of students live in inadequate accommodation
buildings
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8. Universities in the UK
TOP 20 UK universities by size (2009-2010)
Total number of Universities -
Rank Institution Total students 118
1 The Open University 209 705
2 University of Manchester 40 400 Total number of Students - 2,49
3 Manchester Metropolitan University 35 730 million (2009-2010)
4 Sheffield Hallam University 35 410
London has 40 higher education
5 University of Nottingham 34 120
6 University of Leeds 33 585
institutions and has a student
7 University of the West of England 32 840 population of more than 400 000
8 University of Central Lancashire 32 295 The maximum tuition fee
9 University of Plymouth 32 200
(students from UK and ES) a
10 Northumbria University 31 425
11 University of Birmingham 30 125
university or college can charge
12 Cardiff University 29 685 is:
13 Teesside University 29 055 £3290 for 2010-11
14 University of Warwick 28 870 £3375 for 2011-12
15 University of Greenwich 28 805 £9000 for 2012-13
16 Leeds Metropolitan University 27 865
17 University of East London 26 930 Tuition fees for overseas students
18 Liverpool John Moores University 25 860 – from £8750 (2009-10)
19 University of the Arts London 25 750 depending on the course
20 London Metropolitan University 24 335
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9. Rankings of Universities in the UK (2010)
TOP 30
Rank Name Rank Name
1 Oxford University 16 Loughborough University
2 Cambridge University 17 King's College London, University of London
Imperial College of Science, Technology &
3 18 The University of Sheffield
Medicine
4 University of St Andrews 19 Southampton University
5 London School of Economics and Political Science 20 The University of Nottingham
6 The University of Durham 21 Sussex University
7 University College London 22 The University of Birmingham
8 University of Warwick 23 University of East Anglia
9 University of York 24 Glasgow University
10 Lancaster University 25 Newcastle University
11 Edinburgh University 26 Leeds University
12 Exeter University 27 School of Oriental and African Studies (SOAS)
13 The University of Bath 28 Liverpool University
14 University of Bristol 29 Aston University
15 Leicester University 30 The University of Manchester
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10. The Student Accommodation in UK
Market Information
Higher education student
population (million)
Demand
2,55
The total number of people in higher education
2,5
has grown from 1.8 million in 1996-7 to
2,45
approaching 2.49 million in the academic year
2,4
2009-10.
2,35
The majority of key university towns reported 2,3
nearly 100% occupancy for the last academic 2,25
year, with private halls targeting affluent 2,2
domestic students, overseas students and 2,15
mature students, the latter two of which are
growing in number.
Source: Higher Education Statistics Agency
Rental growth is of 5% per annum over the last six years in the student accommodation
sector, compared to 0,6% for commercial property.
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11. The Student Accommodation in UK
Market Information
Accommodation options
Approximate average costs for students
Institution maintained property per year
Private-sector halls Tuition fees £ 9 000
Parental/Guardian home
Accommodation £ 5 500
Own residence
Living costs (food, bills etc.) £ 6 500
Other rented accommodation
Other TOTAL £ 21 000
Supply
The supply of privately run purpose built student accommodation continues to be
dominated by the largest four service providers – UNITE, UPP, Opal and Liberty
Living.
Although there has been substantial development, existing supply levels still mean
the vast majority of students are not able to take the option of a privately operated
room. Only 26% of London’s higher education students are able to access halls, with
only 3% having access to private sector halls.
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12. University Partnership Programme (UPP)
Market information
University Partnerships Programme (UPP) is the UK’s leading provider of on-campus
managed university accommodation
UPP specialises in establishing long-term partnerships with universities to fund,
develop and operate student accommodation. With more than a decade of
experience, UPP delivers risk-free property solutions which are fully funded by UPP
UPP is owned and actively supported by funds managed by Barclays Infrastructure
Funds, part of Barclays Capital
39 000 students in 126 properties across 33 towns and cities across the UK
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13. Definitions
Market Information
Standard room – room without private bathrooms
En suite room – room with private bathrooms
Studio provide a modern approach to self contained accommodation where students
have their own facilities. The accommodation comprises a combined living and
bedroom area, en suite shower room and kitchen facilities.
Cluster Flat – apartment consists of standard rooms or en-suite rooms with shared
kitchen
Catered hall of Residence - Dining facilities are either in the Hall or in another Hall
close by and are canteen style service.
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14. Links Page
Market information
Unite Plc
www.unite-students.com/home
UPP Limited
www.upp-ltd.com/
Opal Property Group Limited
http://opalstudents.com/
Plymouth University (Accommodation)
ww.plymouth.ac.uk/pages/view.asp?page=25302
Exeter University (Accommodation)
http://www.exeter.ac.uk/accommodation/
AXIO
http://www.axio.lv/
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15. Current Projects
St. Augustine’s Project in Plymouth
Sidwell Street apartments in Exeter
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16. Location
Exeter
Plymouth
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18. Project description
St. Augustine’s Project in Plymouth
It is planed to develop fully equipped student accommodation for students of Plymouth
University with 84 studio rooms with internet access, bike storage and CCTV.
Alexandra road, Plymouth
6 floor modern building
Total space 2880 sq m
7 flats and 77 studio
St. Augustine’s apartments are within 15 min walking distance of the University
Letting period 43 or 51 weeks
Estimated price (equivalent market prices)
Studio – 170 GBP– 190 GBP per week
Flat – 120 GBP – 170 GBP per week
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19. Market information
St. Augustine’s Project in Plymouth
Accommodation options
University allocated accommodation:
◦ University-managed hall of residence (are managed by UPPL) total number 6
(468 standard rooms, 1168 en-suite rooms, 122 large en-suite rooms and 14
studio rooms)
◦ University-allocated cluster flats (owned and managed by Unite plc) total
number 4 (108 standard rooms, 639 en-suite rooms, 14 studio rooms)
University approved accommodation
Agencies and Managing Agents
Current Uptake 100%
The University of Plymouth has over 30 000 students and an annual income of around
£160 million.
There remains a 40% shortfall of available accommodation for first-year students.
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20. St. Augustine’s location
“St. Augustine”
Alexandra road,
Plymouth
All approved student
accommodation is within the
highlighted area, and is
therefore within walking
distance of the main campus.
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21. Financial information
St. Augustine’s Project in Plymouth
Total planed investments 4.2 m GBP
Land 0.6 m GBP
Construction 2.9 m GBP
Other 0.7 m GBP
Equity 1.28 m GBP
Construction period 12 months
Estimated sales price 5 m GBP
Sales period One year after construction
Estimated IRR 19%
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23. Project description
Sidwell Street apartments in Exeter
It is planed to develop fully equipped student accommodation for students of Exeter
University with 96 rooms: 67 en suite rooms in cluster flats, 26 studio and 3 double
bed flats with internet access, cycles storage, Laundry and CCTV.
Sidwell Street 69 - 73, next to the cinema Odeon, in the centre of Exeter
The existing building will be demolished
6 floor modern building in the centre of Exeter
67 en suite, 3 flats and 26 studio
Retail area for rent on Ground Floor
Sidwell Street is located midway between the Streatham Campus and St. Luke’s
Campus
Letting period 43 or 51 weeks
Estimated price (equivalent market prices)
En-suite room 140 GBP per week
Studio 170 GBP – 190 GBP per week
Flat 120 GBP – 170 GBP per week AXIO Capital
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24. Sidwell Street apartments Location
69 – 73 Sidwell
Street, Exeter
Sidwell Street 69 – 73 is
located midway between
the Streatham Campus
and St.Luke’s Campus
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25. Market information
Sidwell Street apartments in Exeter
University accommodation is accommodation owned, managed or approved by the
University of Exeter
Catered Halls of Residence total number 5 (1423 single rooms and 117 twin
(shared) rooms)
Self – Catering Residences total number 13 (1159 en-suite rooms, 1174 standard
rooms and 258 studios rooms)
Current Uptake 100%
UPP has entered into a long-term partnership with the University of Exeter to provide
additional student accommodation on the university’s Streatham Campus. The three-
year construction project started in 2009. Investment - £130 million. Occupancy: 100%
at start of academic year 2009/2010.
UPP’s partnership with the University of Exeter involves the transfer of 980 rooms of
existing accommodation, of which 621 will be retained and operated by UPP Asset
Management. The remainder will be redeveloped to provide 1948 new en suite rooms,
built using UPP’s Eco Residence model.
The University of Exeter has 15 700 students and an annual income of around £227
million.
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26. Financial information
Sidwell Street apartments in Exeter
Total planed investments 6.9 m GBP
Land with existing building 2.5 m GBP
Construction 3.5 m GBP
Other 0.9 m GBP
Equity 3.4 m GBP
Construction period 12 months
Estimated sales price 8.4 m GBP
Sales period One year after construction
Estimated IRR 22%
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28. Exit Strategy
After construction to sell to operator
◦ UNITE
◦ UPP
◦ Opal
◦ Liberty Living etc.
After construction to sell to financial investor
◦ Investment funds
◦ Pension funds etc.
After construction to operate from 1 to 2 years, to get rental income and then to sell
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29. Contacts
Andis Riekstins
phone: +371 29 455 355
AXIO Capital UK Ltd.
London, 37 Knox rd, GU2 9AH, Guildford, Surrey
phone: +44(0) 07515253095, fax: +44(0) 1483243501
e-mail: office@axiocapital.eu / juris.lujans@axiocapital.eu
SIA AXIO Capital
Mārupes nov., Mārupe, Kārļa Ulmaņa gatve 119, LV-2167, Latvija
phone.: +371 67 244 122, fax: +371 67 504 614
e-mail: office@axio.lv
www.axiocapital.eu
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