Arcapita’s strategic exit: Reinforcing success in US student housing market

The portfolio, centered around Clemson University in South Carolina, United States, has found a new home with Core Spaces, a vertically integrated student housing property owner. Arcapita’s ability to navigate and thrive in the complex world of student housing investments showcases the strength of its investment strategy.

Amid the challenges posed by the global pandemic and economic fluctuations, Arcapita’s targeted approach to campus selection has paid dividends. The portfolio consistently boasted strong occupancy levels and rent growth, catering to the pent-up demand from both domestic and international students who seek the on-campus experience.

Over the course of three years, Arcapita, in collaboration with its operating partner, executed a meticulously planned business strategy. This included unit and amenity renovations, complemented by enhanced marketing initiatives aimed at bolstering occupancy and rental growth.

Remarkably, these renovations were completed ahead of schedule and within budget. Throughout the investment holding period, the portfolio maintained an impressive near-100 percent occupancy level and rent collection rate. This led to a notable Compound Annual Growth Rate (CAGR) of 9.4 percent in net operating income since the portfolio’s acquisition.

Brian Hebb, Managing Director and Head of US Real Estate at Arcapita, highlighted, “The resilient performance of our rental housing and industrial real estate portfolio, even in the face of the pandemic, reaffirms the strength of our investment strategy. Despite recent challenges, the US real estate market continues to offer favorable investment conditions, especially with an improving macroeconomic environment in the world’s largest economy.”

Ahmed Al Shirawi, Managing Director and Deputy Head of Investor Relationship Management added: “Our successful exit from this second student housing venture in just 18 months underscores the robustness of our US real estate strategy. We maintain our view that student housing is a vital component of our US rental housing focus, offering substantial downside protection and compelling returns for our valued clients and investors.”

Arcapita’s exit from ARC US Student Housing Portfolio II not only showcases its ability to navigate turbulent waters but also reaffirms its dedication to delivering value and returns to its clients. With a track record of strategic success, Arcapita remains a formidable player in the US real estate market, leaving an indelible mark on the industry.