Amiri student REIT seeks middle ground

Amiri Capital’s new student housing REIT will target the vast middle ground between its two listed rivals in order to build a £1bn portfolio in the next five years. Empiric’s £577m portfolio has an average asset size of £7.1m while GCP targets assets of more than £70m in London only. Unite, the biggest player in the sector and a holder of predominantly larger assets, is not yet a REIT but is due to convert at the start of next year. Amiri is targeting a £100m listing early next year and will buy prime assets outside London. Investments will target cities with two universities, generally ones with a Russell Group institution and a former polytechnic. The company expects to provide an initial dividend yield of 4%, with the goal of reaching 7% and a total annualised return of 11%. Richard Ellis, director of Amiri Capital, said that investors wanted a defensive asset in times of volatility and student accommodation was less affected by market cycles. Occupancy in UK student housing has not dipped below 94% since 2007, and the company is predicting the rate will stay at 99% for at least the next five years. Ellis said: “The consistent message is a constant thirst for yield, and there aren’t enough options for that, especially not ones with a perceived defensive quality where you’re not taking too much risk. “The logistics space market is particularly crowded in terms of investor interest, so it’s harder to buy well. Yields on logistics assets have come in more, so it’s certainly possible we will deliver a better dividend yield than that sector.” Bindesh Shah, a partner at Amiri Capital, will lead a management team dedicated specifically to the REIT and Stuart Jarvis will lead the REIT’s investment team. • To send feedback, e-mail karl.tomusk@estatesgazette.com or tweet @ktomusk or @estatesgazette