Real estate investment manager Tokoro Capital and its student management business Homie have formed a partnership with GCM Grosvenor (GCMG) to invest in the UK’s student housing market.
The vehicle is backed by an initial £75m commitment from GCMG, giving it around £200m of investment capacity with leverage.
The partnership will primarily focus on acquiring and repositioning traditional houses in multiple occupation (HMOs) and first-generation, purpose-built student accommodation (PBSA).
The partnership aims to provide more affordable rents for domestic students in comparison to “traditional, highly amenitised PBSA”. It has already secured an initial seed portfolio of properties with 440 beds.
HMOs make up around 80% of investable student housing stock in the UK and are mainly owned by private landlords.
GCMG managing director Peter Braffman said: “We are thrilled to partner with Tokoro and Homie to expand our European presence into the UK student housing sector. Their clear strategic vision and proven execution capabilities give us confidence in their ability to create value.”
Tokoro co-founding partner Max Bassadone added: “Sanjay and I have been looking at this subsector of the UK student housing market for a long time and aggregated a portfolio under TKO-II, demonstrating our capability both in terms of execution of this investment thesis and building an operating platform.
“GCMG’s conviction in forming this vehicle with us further validates this.”
Last summer, Tokoro secured two separate loans from real estate lender Leumi, one to bolster its student accommodation portfolio and the other to support its cluster-led student housing platform.
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