The Power of Elkstone’s Student Accommodation Investments
The opportunity for student accommodation investment in Ireland is strong and growing.
The student population in Ireland is growing at a rate that outpaces the development of student housing.
All of these students will need somewhere to live. Ideally, somewhere safe, affordable, and fun - with diverse amenities within a 15-minute walk.
Elkstone pioneered the development of “Purpose-Built Student Accommodation” in Ireland (known as “PBSAs”), and has a decade of experience planning, developing, and selling PBSA assets.
You now have the opportunity to invest in Elkstone’s PBSA projects.
This article will help explain why Elkstone’s PBSA investments are so attractive.
We will cover:
Elkstone’s experience in developing student accommodation projects
The value of placing your money alongside an institutional investor
Sustainability: Why Elkstone’s student accommodation projects sell quickly
How Elkstone allows you to tailor your investment to your risk profile & appetite for gains
For a complete guide to the Student Accommodation opportunity in Ireland, see Supply & Demand for Irish Student Accommodation Investments
Elkstone’s involvement in student housing encompasses all aspects of PBSA development projects - from planning & permissions, to construction of the facilities, to management of the asset, through sale to a 3rd party.
Elkstone’s Experience in Student Accommodation Investment
Elkstone was involved in Ireland’s first Purpose-Built Student Accommodation, Montrose student accommodation, in 2012.
Alan Merriman and the team at Elkstone recognised the incredible opportunity for student accommodation investment in Ireland. Ireland’s population is growing, and so is the percentage of people in Ireland that take part in higher education. Add to that the growth of international student populations in Ireland - particularly after Brexit. The result is a situation where the demand from students dwarfs the supply of student housing.
For a deeper dive into supply & demand for student housing in Ireland, download our guide.
Elkstone’s involvement in student housing encompasses all aspects of PBSA development projects - from planning & permissions, to construction of the facilities, to management of the asset, through sale to a 3rd party.
Since their inaugural foray into PBSA development in 2012, Elkstone has managed the development of 5 projects through final sale to 3rd party investors. Currently Elkstone is managing the development of a further 3 student accommodation projects in Ireland.
Through these experiences, Elkstone has honed a keen expertise in dealing with Irish and local governments to secure planning permission for their PBSA projects. Similarly, Elkstone has built relationships and expertise in the construction industry, in PBSA occupation and management, and in their eventual sale to 3rd parties.
This experience helps investors take comfort that Elkstone knows how to look around corners to circumvent obstacles, as they manage their investments.
““The size of the supply and demand gap helps determine the level of appetite for a project. There is a significant supply-demand gap in the Irish PBSA sector. PBSA has a much higher, much more reliable supply-demand gap than other sub-sectors making it desirable from an investment perspective””
Investing in Student Accommodation alongside an Institutional Investor
Choosing an investment vehicle for your hard-earned money can be difficult. Knowing that you have placed your money alongside an institutional investor can bring comfort.
Institutional Investors help provide Rigorous Due Diligence
In 2023, Elkstone announced a partnership with the global investment powerhouse Harrison Street. Harrison Street is a leading investment management firm with approximately $55 Billion under management.
Institutional investment firms such as Harrison Street typically deal only with extremely high-net worth individuals, private equity firms, pension funds and sovereign wealth funds. Institutional investment houses raise money from these clients, and then place it into various large-scale projects, such as building construction and infrastructure development, as well as stocks, bonds, and currencies.
The first project that Elkstone and Harrison Street worked on was a 142-bed PBSA in Dublin, Stoneybatter Place.
Partnering with a global institutional investor like Harrison Street helps Elkstone investors take comfort that they have chosen a well-researched investment opportunity.
First, the institutional investor has deeply researched the Elkstone team, their expertise, and their track records, and determined Elkstone to be a worthy partner overall.
Secondly, the institutional investor reviews the PBSA project on an individual basis - deeply researching the specific points of each development stage prior to green-lighting investment.
This due diligence on the part of the institutional investor can help Elkstone private clients take comfort that they are making a sound investment.
Partnering with a global institutional investor like Harrison Street helps Elkstone investors take comfort that they have chosen a well-researched investment opportunity.
Institutional Investors help Elkstone Lower the Price of Entry
Working with an institutional investor also helps Elkstone make student accommodation investments more accessible to private investors.
Bringing an institutional investor onboard means that a large part of the overall PBSA project is already funded. This helps bring down the price of entry for individual private investors.
Many private individuals would otherwise be priced out of an investment in a large-scale real estate development such as student accommodation.
“Traditionally we would have seen institutional investors as the ones to invest in alternatives like real estate, because of the large cheques they could write - and had to write - in order to get access to these types of investments. But we’ve seen a move toward democratizing access to alternative investments. Elkstone has been an Irish first mover in this trend.”
Elkstone Student Housing Investments are more Attractive due to their Sustainability
Environmental sustainability is a key factor in the success of Elkstone’s PBSA projects.
You’d be forgiven for thinking that sustainability isn’t top-of-mind when considering investments. But more and more, that is the case.
The European Green New Deal includes provisions that will require institutional investors to include sustainable projects in their investment portfolios.
Going forward, institutional investors will have an increasing incentive to favour sustainable projects over others. Private equity houses, sovereign wealth funds, and pension managers will increasingly be looking to acquire sustainable assets.
The value of Elkstone’s PBSA projects as acquisition targets will continue to increase as sustainability laws evolve.
Sustainability is a cornerstone of Elkstone PBSA projects, at every phase of development. During the construction phase, Elkstone follows Fitwel sustainable building practice standards. Elkstone aims to qualify for Ireland’s BREEAM efficiency standards as well as for an some of the highest BER ratings.
As EU regulations continue to evolve, Elkstone’s student accommodation projects will be increasingly attractive acquisition targets for third party buyers. This gravitational pull can help reduce the risk of the overall project.
Elkstone Allows you to Tailor your Investment to your Risk Preference and Appetite for Gains
Not all investors are alike. They may have different goals overall, or different goals for different investments. Elkstone understands this, and provides a myriad of options for targeting the right level of risk and potential gains.
You can learn more about how alternative investments such as real estate can offer outsized gains and reduce overall investment portfolio risk here.
First - Elkstone allows private individuals to choose the stage of development to invest in. Private individuals can invest in the planning stage, the construction stage, or the asset stage of the PBSA development.
The planning stage carries the largest risk - as it is furthest from completion & final sale. To compensate for higher levels of risk at the planning stage, Elkstone offers higher rates of return.
Construction phase is less risky, and asset phase is the least risky. Private investors are offered returns that match the risk levels of these stages.
Secondly - Private individuals may choose to place funds in either the debt or the equity side of the student accommodation investment. Private investors can choose the debt or equity side of each phase of development.
Debt investors in Elkstone’s PBSA projects receive returns in the form of interest payments, and then stand to receive their full principle back at the close of the stage. Elkstone is able to offer its debt investors strong rates of interest, especially given that the investments are asset-backed.
Debt owners can feel secure knowing that debt, being senior to equity, is paid back prior to equity, in the event of a sale.
Equity owners receive the benefit of capital appreciation over the course of their investment, and investors in the asset stage can benefit from rental income - after payment of interest on debt.
Between the choice for different PBSA projects, the choice of stage to invest in, and the choice between debt and equity, Elkstone investors have the opportunity to tailor their student housing investment according to their own appetite for risk, and according to their investment goals.
Conclusions
Set up a conversation with an Elkstone representative to learn more about how investment in PBSAs can help you reach your investment goals.
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Elkstone Capital Partners Limited (trading as “Elkstone” “Elkstone Partners” and “Elkstone Real Estate”), the provider of this investment, is not regulated by the Central Bank of Ireland. This investment opportunity does not benefit from any investor compensation scheme nor the Central Bank of Ireland’s Client Asset Regulations. A complaint may be referred to the Financial Services and Pensions Ombudsman (‘FSPO’), however as these investments are unregulated, there is no guarantee the FSPO will accept it.
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