Avenue Capital is undertaking a strategic review of its £450m student housing portfolio which could lead to a sale.
The US investor has appointed JLL for the review, which may see it exit the UK student housing sector two years after making its first purchase.
A formal sales process would take place in the autumn.
Avenue’s portfolio comprises 6,000 beds and a disposal would offer a major opportunity for competitors including Greystar and LetterOne to increase the scale of the platform businesses they are looking to build. It is likely to be one of the last high-quality collections of assets available in the UK.
Jo Winchester, senior director of student housing at CBRE, said: “Because Avenue is backed by private equity, it would have been hoping to take advantage of a softer market, but perhaps it has been unable to get the required returns in the recent strong market.
“It is an obvious time to sell as there is a crop of well-funded, reliable buyers that are looking to extend their portfolios.”
More than £4bn has been invested into the student housing sector this year, according to CBRE. A further £1.4bn is expected to be invested into the sector before the year-end.
New York-based Avenue Capital entered the UK student housing market in 2013 with a £100m purchase of part of the collapsed Opal Property Group. In the same year, it bought two further tranches for a combined £270m and has since added single assets and forward-funded development projects.
