The Competition and Markets Authority has released an assessment stating that a proposed £3.3bn GIC and Greystar deal could lead to competition concerns in Birmingham.
The jv had agreed to acquire Student Roost, a purpose-built student accommodation provider covering key university locations across the UK, from one of Brookfield’s real estate private funds earlier this year.
Student Roost is the UK’s third-largest student accommodation provider, with more than 23,000 beds. Its development pipeline comprises a further 3,000 beds in several university cities, including those home to Russell Group institutions.
The deal had initially been expected to close in Q3 2022. In its phase one assessment, CMA evaluated that the acquisition would not lead to competition concerns in most cities, because the combined businesses would continue to face sufficient competition from other accommodation providers.
But in Birmingham, CMA found that the combined businesses would not face enough competition across several university campuses, potentially resulting in higher prices and lower quality services for students.
GIC, Greystar, and Student Roost intend to offer remedies to fully address the CMA’s findings and submit a formal proposal within the next five working days.
The watchdog has said that, provided the proposed remedy addresses its concerns, the merger will be cleared without the need for an in-depth phase two investigation.
Colin Raftery, senior mergers director at CMA, said: “Aside from fees, rent is the biggest expense students face, and the rising cost of living is putting even more pressure on student budgets.
“Many university towns and cities are already dealing with a student accommodation shortage, which is why it is crucial that private providers like those involved in this deal are competing effectively.
“We are concerned this deal could result in students in Birmingham seeing higher prices or lower quality services. GIC, Greystar and Student Roost have accepted our concerns and have told us that they plan address them. A solution that fully resolves our concerns will avoid the need for a more in-depth investigation.”
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