For several years, investors looking for new forms of secure investments have become interested in student residences.
Halfway between classic housing under simple management and tertiary real estate under professional management, investments in student residences imply mastery of its dynamics and its players.
Although low-risk real estate investments are increasingly rare, the student housing market offers good potential. As the number of students continues to increase in many European countries, the need for student accommodation continues to grow. For France alone, there will be around 2.79 million students in 2020*. This number is constantly increasing and is expected to exceed 3 million by 2030.
The branch specializing in alternative investments of Rodschinson Investment puts its experience at your service for an in-depth study aimed at valuing your investments and ensuring the balance of their operations:
Rodschinson Investment's experts also assist you in carrying out projects to purchase or sell alternative assets via:
Rodschinson Investment supports numerous investors in their development strategies in terms of alternative investments.
The experience of its consultants involves both in-depth knowledge of players, developers, investors and operators, as well as precise analysis of sector data.
Student residences are operated and maintained by a professional manager. The investors and the operator sign a commercial lease. The rental income generated by the operation of the residence is transferred quarterly by the operator.
The different types of accommodation:
The main selection criteria for these accommodations are:
The advantages for investors:
Student housing is in high demand from investors due to the regular and relatively low-risk income it provides.
Given the steady revenues of stabilized institutions, the capitalization rate approach or a comparable approach are commonly used valuation methods.
Student housing generates significant demand from investors due to its stable income and relatively low risk.
Given the stable revenues from stabilized facilities, the capitalization rate approach or a comparable approach are commonly used valuation approaches.
Methodology | Adequacy | Brief |
---|---|---|
Comparable Approach (Price/Bed) | Identical assets of varying sizes | Price comparison by number of beds from other transactions. |
Income Approach (Capitalization Rate) | Stable establishments with high occupancy | Apply market capitalization for similar assets. |
Income Approach (Present Value Cash Flow Method) | New establishment with increasing occupancy rates | Projection of cash flows up to the year of stabilized operations. |
Cost Approach | Value of the establishment | Market value of land and addition of current construction cost. |
IQ Student accommodation or IQ is the largest provider of student accommodation in the UK with over 28,000 beds.
With an occupancy rate of 97%, it generated a turnover of 223 million pounds and a net operating margin of 76.4% in 2019.
In February 2020, Blackstone, one of the world's largest specialist property investment firms, offered £4.6 billion to acquire IQ student accommodation.
It is the largest student housing transaction in the world.
Elements | Values |
---|---|
Transaction Value | £4.660m |
Turnover | £223.6m |
Net Operating Income | £168.4m |
Multiples | |
EV/AC | 20.9 |
EV/EBITDA | 32.4 |
Price/Bed | GBP166,428 |
To understand how Blackstone valued IQ at 4.6 billion, we use the cap rate approach.
First, from the annual filing, we calculate the company's annual net operating income
Elements | Values (M GBP) |
---|---|
Rental Income | 216.6 |
Other income | 6.6 |
Total Revenue | 223.2 |
Cost of sales | 54.8 |
Net Operating Income | 168.4 |
Then we apply the appropriate capitalization rate for those properties. In the pie chart we see that IQ's installations are primarily concentrated in London, with a balance of 48 %s spread across other key Russell Group cities
Using market cap rates, we estimate the effective cap rate for IQ's entire real estate portfolio to be 4.1 %. Applying the derived values we obtain a valuation of £4.1 million.
This seems far from the reported deal value, but keep in mind that this is only the 28,015-bed portfolio. IQ also has 4,000 beds under development that are not bringing in revenue today. At the time of the transaction, 4,328 were under development.
We can assume that the value of these non-operational beds corresponds to their asset value. Proportionally, we value the pipeline at £502 million.
Adding the two values together, we get approximately 4.6 billion, which corresponds to the announced value of the transaction.
Elements | Values |
---|---|
Pipeline Beds | 4.398 |
Operational Beds | 28.015 |
Total Beds | 32.413 |
Total Value Valuation | 3.7 billion GBP |
Pipeline Value = (Beds in Pipeline x Total Value) / Total Beds
Pipeline value = 14% x 3,700 M
Pipeline Value = £502m
Corporate real estate is obviously largely made up of spaces intended for offices.
It is essential to be aware of developments in terms of organization and management in order to think about arrangements that support the company's strategy.
Develop an ergonomic space, define the size, location and layout of the offices, Rodschinson Investment is aware that your offices reflect the spirit and positioning of your company.
Attractive, they facilitate the arrival of young talents wishing to join the company, support your image among your partners and contribute to your expansion. The issue is strategic.
Rodschinson Investment supports its clients in carrying out their projects thanks to its knowledge of local markets (including the gray market and off-market) and provides them with a tailor-made service.
Creation and capture of value throughout the life cycle of projects and real estate.
Real estate decisions are thought of as real strategic tools, vectors of image and culture for your company.
With office properties ranging from multi-tenant high-rises in urban areas to suburban office campuses, investors have a wide range of different investment opportunities. Additionally, in recent years, a series of sub-asset classes have emerged, making the commercial office real estate sector even more attractive to investors.
In recent years, the nature of office space has changed dramatically. The co-working model is a good example of this. WeWork is the best example of this trend, and many similar companies are contributing to this shift in demand. More and more companies, large and small, are opting for open-plan office spaces, with highly flexible leases, as well as community facilities and group events. Co-working demonstrates the changing demand for office space, and our team of global experts are constantly responding to these changing needs.
The booming tech sector has been a major driver of new office space in recent years. Whether in London, Barcelona, Hong Kong or many cities across North America, the emergence of start-ups and related businesses has boosted demand for office space. By some estimates, the tech sector has accounted for nearly a quarter of all new office leases in the past two years.
The technology sector is not the only one driving demand for office space and thus attracting more capital to this segment. Investors are increasingly taking a long-term view and analyzing, more than ever, the changing trends of potential tenants and their employees. Forward-looking investors and their development partners are looking to include amenities and features that fit the workforce of tomorrow. Good examples are bike storage, common areas, rooftop terraces, a bar, mixed-use spaces and gyms.
Office buildings are sought-after investments because of the long lease terms that ensure the stability of the real estate assets. Office buildings located in central business districts, such as La Défense in Paris or Canary Wharf in London, are often among the core real estate investments of pension funds and real estate investment trusts.
A regular and recurring income over a long period of time is best assessed by the capitalization rate approach. Furthermore, if we assume that annual rents for all properties in a region increase at the same rate and that the operating expense ratio is similar, the gross rental yield will provide a similar result to the capitalization rate.
In the constantly evolving mobility sector, each parking operation requires a review of systems, technology, equipment or operating contracts.
Our experts develop a successful parking program by identifying revenue opportunities, maximizing profitability, improving revenue control systems, improving customer service, reducing operating costs and improving customer satisfaction. audience.
We understand your concerns and needs and provide parking operation solutions aimed at business objectives.
Our consultants support a wide range of clients, whether it is a municipality looking to transfer its activities to a multi-site structure, or a university, an airport or a commercial property looking to generate additional revenue or improve customer service.
Rodschinson Investment helps companies design, update and improve their Parking operations.
We guarantee the use of the best smart solutions in the sector with cutting-edge technologies.
Our team is there to assess your needs, whether it involves determining the number of places, making a technological choice or conducting a potential study.
Our mission does not end with the acquisition of a parking lot. At ROD Parkings, we develop a well-planned business strategy to operate your parking lot like any other business.
To create your parking business plan, we start by defining your goals and objectives and analyze the upcoming financial, regulatory and other requirements to operate your parking lot in addition to the money you have already invested in purchasing the property. This way, you start earning income quickly, allowing you to recoup your investment as quickly as possible.
Many investors are looking for stable, long-term returns in alternative asset classes. We are seeing an increasing number of them turning to the parking space segment. This relatively non-traditional real estate opportunity is driven by the continued growth in car ownership, while the drive to make cities greener has put pressure on supply. As a result, parking fees and therefore rental income are on the rise.
Parking businesses are often valued as a multiple of the revenues they generate. Special adjustments are made depending on whether the businesses are new or have reached a stable state.
Q-Park is a car park operator in Belgium, Denmark, Germany, France, Ireland, the Netherlands and the United Kingdom. Based in Maastricht, it is the largest parking provider in the Netherlands and the second largest in the European market.
Q-park was acquired by KKR, a leading investment company that manages multiple asset classes, for €2,905 million.
From a strategic perspective, the transaction gives KKR a significant European presence in a niche but relatively growing asset class.
Using previous deal methodology, we compare the Q-park acquisition to some of the recent peer acquisitions and their valuation multiples. We can see that the revenue multiple increases with higher EBITDA margin, while the EBITDA multiple is in a stable range of 13-16 among peers.
If we compare recent transactions involving Q-park's peers, SP Plus and NCP, they materialized for 137 million and 195 euros respectively, which is very close to the 0.8x EV/Revenue we have here.
As Q-Park has a higher EBITDA margin than its competitor SP Plus, it should have a higher revenue multiple. Assuming a multiple of 3.6x Q-park's turnover, we reach a value very close to 2.95 trillion euros.
We can verify this by taking the average enterprise value relative to the peer group's EBITDA multiple and applying it to Q-Park's EBITDA. Again, we obtain a value close to the value derived from the revenue multiple.
With proven returns, shared risks and profits on resale, residential real estate assets represent a great investment opportunity with limited risk.
The regulations governing this asset class present many complex specificities that it is important to master before getting started, such as recent texts on social housing or the risk of pre-emption...
A team of Rodschinson Investment experts is entirely dedicated to residential real estate issues.
The experience of our advisors allows them to advise you on the sale of individual housing or buildings and the valuation of assets.
Thanks to the privileged relationship that we establish with each client, we take into account their specificity and their profitability objectives set together in order to offer a personalized proposition and results that meet expectations.
Rodschinson Investment advises and supports you in the sale of diffuse housing
Support and strategic advice on residential asset arbitrage issues – en bloc sale:
After a complete analysis of the market and the local land situation, Rodschinson Investment carries out a valuation:
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Investing in real estate is undoubtedly a good choice for a stable return. In the long term, the stability of the value is a real asset. You not only get a return on your rental income, but you also benefit from your investment again when you resell your property after a few years.
Get your asset to market quickly with a structured sales process to win. Our team is equipped to identify your needs and to find a buyer for your property under the best conditions and deadlines.