Xior Student Housing (“Xior”) makes a huge leap forward in its international expansion plan by signing an agreement with Basecamp Group (“Basecamp”), European Student Housing Fund I (“ESHF I”) and European Student Housing Fund II (“ESHF II”) to acquire a €939 million portfolio of attractive, high-quality, PBSA assets operated by Basecamp. This unique portfolio consists of 5,341 units spread over 11 newly-built, state of the art assets (8 operational and 3 projects under development). All residences are situated in top-tier student cities in Germany, Poland, Denmark and Sweden. Basecamp is a specialised developer and operator of student housing to create smart student living spaces perfectly located to universities.
The acquisition will lead to:
- An increase in the total fair value of the portfolio to €3.7 billion (+32%) adding 5,341 units in 9 leading university cities
- Xior enhancing its profile as the number one student housing platform in continental Europe with a portfolio of 26,526 units and a presence in 43 top-tier university cities in 8 countries, serving a target market of 8.5 million students
- Expanding Xior’s geographical diversification by being immediately operational in the German and Nordic student housing markets and by supporting its ambition to strengthen its position in Poland
- Shifting up another gear in ESG by adding properties built to BREEAM Very Good or equivalent standards to the portfolio
- A landmark transaction that will create value for all shareholders of the pro forma group and will be earnings accretive as of the first year (including the c.€252 million capital increase)
Christian Teunissen, CEO of Xior, commented: “From Xior’s start in 2007, we have continued to grow and professionalise. The company rapidly evolved from a small family business into a true professional student housing player. With this milestone acquisition of Basecamp, we will continue our growth story by adding not only 3 new countries but also 11 state of the art, sustainable assets which are a perfect fit for our existing portfolio and future vision and will further strengthen our position as the market leader in continental Europe. I am confident that the combined expertise of our teams will help bring Xior to the next level.”
Armon Bar-Tur, Executive Chairman of Basecamp, said: “From its inception, Basecamp has been a pioneer in the regions in which it operates, with high-quality student accommodation and a community-led experience at its core. We outpace our competitors through our in-depth understanding of the GenZ audience that we attract. Xior and Basecamp will revolutionise the PBSA market by bringing together our complementary portfolios of properties. We will offer students across Europe the opportunity to live in inspiring rooms and life-enriching shared spaces. Our teams are delighted to come together and continue the exciting evolution of PBSA.”
Through this acquisition, two European market leaders join forces, creating continental Europe’s largest student accommodation platform. The transaction consolidates Xior’s position as the continental European listed leader in student housing. By adding 3 new countries to its portfolio, Xior accelerates its international expansion and enters some of Europe’s wealthiest markets and largest student housing regions. This creates a truly unique continental European platform. The fair value of Xior’s portfolio will increase by more than 32 percent and the number of lettable units rises by no less than 25 percent, an immediate win-win. In one fell swoop, Xior’s targeted student accommodation market expands from 4.5 million to 8.5 million students, all located in largely undersupplied countries and cities.
Basecamp’s extensive up and running high-quality portfolio is comprised of 8 state of the art operational assets totalling 3,635 units, located in cities with exceptionally strong student demand in Germany, Denmark and Poland, and offering a unique student accommodation experience. In addition, the acquisition includes 3 projects under development totalling 1,706 units in Germany, Denmark and Sweden. The residences are newly built and are designed to meet the highest ESG standards. The total investment value of this portfolio is €939 million and includes all operating assets, all operational teams and the development pipeline at full cost, with an expected initial yield of 5.21 percent and an assumed occupancy ratio of 97 percent.
The acquisition of the assets will be financed through a combination of c.€252 million equity through a contribution in kind, c.€85 million existing debt and c.€301 million new financing. A private placement is undertaken by ESHF I and ESHF II will take place (as most of their shareholders do not have a mandate to hold listed exposure), subject to market conditions, post-closing of the transaction to enable ESHF I and ESHF II to monetize part of their holding.
At a later point in time, contributions in the kind of c.€30 million for Basecamp and c.€150 million for Aachen BlueGate will take place.
In addition, the costs to complete the three development projects are expected to amount to c.€121 million.
As a listed company, the transaction is signed but still subject to several conditions precedents including but not limited to Xior’s shareholders’ approval and the approval of the listing prospectus by the regulator (FSMA).
With a student population of 2.9 million, one of the largest student populations in Europe, Germany has seen its international student numbers grow by over 60 percent over the past decade. Germany’s high-quality degree courses, an increasing number of courses taught in English, and free tuition universities make it a popular choice for international students.
The Nordic student market is a highly attractive market with diverse university offers, free tuition for EU students and a chronically undersupplied residential market. The majority of the current student accommodation supply is owned by social housing corporations, commercial investors and private investors, with the quality of the supply and levels of amenities and services varying greatly.
The Polish student market is characterised by strong growth potential and an attractive student market that is still in the early stage of development and can be compared to the student housing market in Western Europe in 2013-2014. With a growing international population and strong undersupply as accommodation is available for only 1 out of 10 students and the current student accommodation being mostly outdated and no longer meeting the requirements of modern students, there is a clear, unanswered need for quality student accommodation.
By adding these new markets to its portfolio, Xior’s targeted student accommodation market will be expanded to 8.5 million students, all located in largely undersupplied countries and cities. Xior sees great potential in these markets and has the ambition, as owner and operator, to offer an answer to this structural shortage.
The acquisition of Basecamp is a major step forward in Xior’s international expansion plans and will catapult Xior to the undisputable market leader in continental Europe. The combination of these two complementary portfolios will result in the first continental European PBSA platform consisting of high quality, sustainable and geographically diversified assets, which will all be owned and operated by Xior.
It will also increase Xior’s geographic diversification and international footprint by adding 9 top-tier university city locations in 4 countries, accelerating Xior’s international expansion ambitions. All the properties are built to BREEAM Very Good or an equivalent standard and are designed to prioritise demand-side energy management and automated monitoring, use energy-efficient appliances and meet high levels of certified building efficiency. Additionally, the acquisition will leverage the existing platform and capabilities to create incremental value and cross-sell.
The operational units will increase from 13,992 units in 4 countries to 17,627 units in 7 countries, based on March 2022 figures. Including the full committed pipeline of the combined group, the portfolio will grow to 26,526 units, spread over 43 cities in 8 countries by adding Sweden. Xior’s gross asset value including its fully committed pipeline is expected to increase to €3.7 billion.
