20 September, 2023 – Arcapita Group Holdings Limited (“Arcapita"), the global alternative investment firm, announced today its exit from ARC US Student Housing Portfolio II, which consists of a student housing community serving Clemson University, the second largest university in South Carolina, United States. The portfolio was acquired by Core Spaces, a vertically integrated owner of student housing properties. This transaction marks Arcapita’s second student housing exit in 18 months, for a total transaction value of more than $175 million during this period.
Arcapita’s student housing strategy has proven to be resilient against macro factors, such as the pandemic and global economic volatility. Due to Arcapita’s targeted approach to campus selection, the portfolio witnessed both strong occupancy levels and rent growth driven by pent-up demand for an on-campus experience from both domestic and international students.
Over the three-year holding period, Arcapita and its operating partner implemented a business plan that was driven by unit and amenity renovations and enhanced marketing initiatives to achieve occupancy and rental growth. The renovations were delivered on budget and ahead of schedule, while the Portfolio’s occupancy level and rent collection rate were maintained at near 100% throughout the investment holding period. As a result, net operating income grew at a CAGR of 9.4% since the acquisition.
Brian Hebb, Managing Director and Head of US Real Estate, said: “The positive performance of our rental housing and industrial real estate portfolio in recent years and throughout the pandemic has re-affirmed our investment strategy. Despite recent challenges, the US real estate market continues to demonstrate favorable investment conditions, especially on the back of an improving macro environment in the world’s largest economy.”
Ahmed Al Shirawi, Managing Director and Deputy Head of Investors Relationship Management, said: “The success of our second student housing exit in 18 months is a reflection of the strength and resilience of our US real estate strategy. We continue to view student housing as a key component of our US rental housing focus, providing significant downside protection and compelling returns for our clients and investors.”