Macquarie Asset Management’s Bold Move into Student Housing
Macquarie Asset Management is making headlines with its strategic acquisition of two niche student housing platforms, BaseStack Living and Milestone. This merger represents a significant investment in Europe’s purpose-built student accommodation (PBSA) sector, which is rapidly gaining traction among investors. The newly combined entity will manage an impressive portfolio of over 12,000 beds across several key European markets, including Germany, Austria, the Netherlands, Poland, Italy, Spain, Portugal, and Denmark.
The Vision Behind the Acquisition
While the financial details of the deal remain undisclosed, it’s noteworthy that Justin Hamer, the owner of BaseStack, will continue to play a pivotal role as a shareholder and the CEO of the merged platform. This level of continuity not only ensures stability but also brings a wealth of experience to the table. Hamer, an industry veteran, co-founded Basecamp Student, which had a significant footprint across Europe before its sale to Belgium’s Xior Student Housing in 2022 for €1 billion. His leadership is expected to catalyze growth in the newly formed platform.
The Market Shift in Student Accommodation
Recent research indicates a notable shift in investment priorities within European real estate, with student housing eclipsing multifamily housing as the preferred asset class for many investors. According to Savills, a real estate services provider, 62% of surveyed investors, representing nearly €720 billion in assets under management, now prioritize PBSA over multifamily properties. This is a marked change from previous years, revealing a growing confidence in the resilience and growth potential of the student accommodation market.
Creating a Comprehensive PBSA Platform
Brendan Jones, head of real estate in EMEA at Macquarie Asset Management, emphasized the strategic nature of this merger. He believes that combining BaseStack and Milestone provides a robust foundation for a sector-specialist platform that can effectively own, develop, operate, and manage capital on behalf of its clients. His vision includes scaling operations across major European markets, which could help mitigate pressures in the residential rental market and provide more specialized housing solutions for students.
Addressing the Housing Shortage
One of the compelling motivations behind the merger is a stark reality: a significant undersupply of suitable accommodation for students across major European cities. Hamer highlighted that many cities have a ratio of fewer than one bed for every ten full-time students. By partnering with Macquarie Asset Management, he aims to tackle this pressing issue through the acquisition and development of new purpose-built student housing, thus addressing both investment opportunities and student needs.
A Broader Real Estate Strategy
This acquisition aligns seamlessly with Macquarie Asset Management’s broader strategy of investing in specialized sectors of real estate. The firm is not only focused on Europe but is also expanding its footprint in Asia, having recently backed a developer to create a $3.5 billion platform across Japan, China, Singapore, and Vietnam. This commitment underscores Macquarie’s intent to partner with specialist operators, which can be challenging to access, thus fostering significant growth.
Conclusion
This merger between BaseStack Living and Milestone marks a pivotal moment in the European student housing landscape. With Macquarie Asset Management’s backing and Hamer’s leadership, the combined platform is poised to play a crucial role in meeting the demand for quality student accommodation while navigating the nuances of the operational real estate market in Europe. As the sector continues to evolve, this strategic move may prove to be a game-changer, setting a precedent for future investments in the burgeoning PBSA market.