THE GROWTH OF A
DYNAMIC NEW ASSET CLASS - A SUPPLY/DEMAND STORY
There are 170 higher education institutions in the UK and a student
population of 2.2m
Culture shift and record exam results are increasing domestic intake each
year. International demand for UK places is also up each year from emerging
economies and EU accession states. Weaker global economies further stimulate
the appetite for higher education.
There is intense competition among universities to attract students. The
availability of prime quality modern accommodation is a critical part of
their marketing plan.
At present there is an insufficient supply of
student accommodation. Only 23% of demand for beds is being met by
university maintained properties. The accommodation universities have is
often outdated and largely not fit for their purpose.
Establishments need funding for teaching and research, leaving little for
property acquisition or refurbishment. The emergence in recent years of
private student accommodation initiatives have therefore evolved.
Private operators are now working with universities to purchase and develop
their existing stock, or build new.
As an investment the sector presents a compelling proposition. Increasing
demand for beds outstrip supply, bad debts are low, occupancy is high and
students pay their rent (which increases each year) in advance.
There is still a long way to go in the UK market.
THE CORAL STUDENT PORTFOLIO The Fund offers investors the opportunity to participate in the growing
sector of student accommodation. The Coral Student Portfolio presents a low
risk profile that targets returns significantly in excess of cash deposit
with low volatility. Investors can access an actively managed fund of assets
that have an unusual supply/demand imbalance and little correlation with
traditional investments including property.
As a fund of funds it invests in established UK schemes and providers, while
also positioning to benefit from the enormous opportunities emerging in
Western Europe.
By spreading exposure to several established specialist providers the
Fund aims to maximise returns and minimise dependency on one single
provider. A further benefit is a broad geographical coverage.
This diversity also provides the Fund with opportunity to participate in
various strategic projects. It can offer secure income streams from long
leases and university nomination schemes as well as enhanced return and
capital growth opportunities from direct let and development opportunities.
The Fund launched in March 2009 as an open ended collective investment
scheme for institutional investors
Student Accommodation In The Private Sector
Only 9% of students are currently housed in private accommodation. Demand is
likely to continue growing, fuelled by increasing student numbers and the
further decline in suitable university accommodation.
The situation in Europe is where the UK was a few years ago. There are some
8m students in the main EU countries and of these only 13% are in purpose
built accommodation. Student accommodation is being seen as the single
largest untapped real estate market in Western Europe.
Universities will continue to work in partnership with the private sector to
provide suitable modern accommodation. This creates an attractive investment
opportunity which benefits:
UNIVERSITIES:
Quality accommodation is key to attracting their share of the growing
student intake. Outsourcing accommodation frees them to concentrate on their
core activities of teaching and research.
STUDENTS : Increased availability of
efficient modern rooms. En suite facilities, internet access, security,
parking, laundry etc.
INVESTORS:Participation in a low
risk sector through a collective investment. A broad spread of private
provider and geographical exposure enhances the opportunities for good
steady returns.
WHY LOWER RISK?
Iincreasing
demand outstrips available supply.
Broad spread of providers,
project types and geographical locations.
Occupancy rates are very high.
Bad debts are very low.
Students pay rent in advance.
THE RETURNS?
The Fund presents a lower risk
profile and targets returns significantly in excess of cash deposits with
low volatility.
Attractive yields.
Additional income streams from
efficient asset management.
Rents increase each year.
Exposure to emerging
opportunities in Western
Europe.
Investment
Adviser & Management
INVESTMENT
ADVISER
With effect from 1st July 2011, the
Fund is advised by CB Richard Ellis which assists in forming the overall
strategy in relation to allocation and selection of the individual student
accommodation funds.
CB Richard Ellis is a Global commercial real estate services firm, selected
by Coral for its particular expertise in student accommodation. Operating
through more than 300 offices worldwide with over 30,000 employees, its
reach is spread across 50 countries in Europe, Middle East and Africa, the
Americas and Asia Pacific.
Within Europe alone, CBRE provide valuation and Advisory services for over
60,725 properties. CBRE Real Estate provides Investment and development
advice to many major clients including The Crown Estate-Regent Street
Portfolio, BBC Pension Trust, Pension Protection Fund, Merseyside Pension
Fund and North West Local Authorities.
Specific Student Accommodation experience is substantial as CBRE is Valuer
to numerous UNITE properties including those located in Bristol, Leeds,
Newcastle, Bath and Portsmouth. Likewise, they assist Opal with their
£290million portfolio of Student Accommodation assets in several nationwide
locations. CBRE Inc is a listed company with a current market capitalisation
in excess of $3.9bn with CBRE Real Estate Finance Ltd being authorised by
the FSA in the United Kingdom.
INVESTMENT MANAGER
Coral Portfolio was established as a brand in 2008 by a group of experienced
industry professionals. It aims to provide a platform of transparent,
regulated Funds which match or exceed the expectations of their
institutional investors.
The Funds are actively managed by Coral S.à.r.l. with careful attention to
risk management and the highest standards of service delivery. Coral’s
professional partners are listed in the directory and further details are
available in the Private Placement Memorandum on request.
Coral Student Portfolio is a compartment of Coral Portfolio S.C.A. SICAV-SIF,
managed by Coral S.à.r.l., both of which are incorporated under the laws of
Luxembourg and regulated by Luxembourg authorities, Commission de
Surveillance du Secteur Financier (CSSF) as a multi-compartment Specialist
Investor Fund.
SECURITY OF FUND ASSETS
RBS Global Banking Luxembourg S.A. has been appointed as Custodian.
The foundations of RBS date back to 1727 and they now have 40million
customers worldwide. Their Trustee and Depositary Services is the
market-leader to the UK’s collective investment scheme industry and today
they work with more companies and schemes than any other trustee. Their team
consists of over 240 global specialists responsible for the trusteeship of
nearly 1,000 funds.
RBS Global Banking Luxembourg S.A., 46 Avenue John F Kennedy, L-1855,
Luxembourg, is supervised by the CSSF and is a fully owned subsidiary of the
Royal Bank of Scotland N.V., which is itself a 98% subsidiary of The Royal
Bank of Scotland plc.
The Custodian is responsible for safekeeping of the Fund’s cash, including
subscription and redemption monies. Following investment the Custodian is
responsible for the custody of the underlying assets on behalf of the
investing institutions.
