After a strong close to 2016, 2017 starts with further enhancement to the global diversification strategy of the portfolio with GSA Coral making its first investment in Tokyo, Japan. GSA Coral has acquired a 25% equity interest in a new development in Hakusan, Tokyo – a 364 bed purpose built scheme due for completion in Q1 2018.
GSA Coral has co-invested in the project alongside the Star Asia Group – a leading Japanese private equity real estate firm that has invested over JPY370 billion in real estate related opportunities. In addition, one of the world’s largest investment management firms and a US-based global pension fund hold a 50% equity stake in the project.
As with recent investments in other new global markets, GSA Coral is at the forefront of another extremely exciting investment opportunity alongside major institutional capital partners. We anticipate that the investment will be accretive to portfolio returns as we take advantage of being the first entrant into the private, purpose-built student accommodation market in Japan.
The Hakusan Property
The Hakusan development is located in Bunkyo Ward, a strong residential and university area north of central Tokyo. Toyo University (c. 29,000 students) is diagonally opposite the project and Tokyo University (c.27,000 students) is within a fifteen minute walk. Both are part of the new ‘Super Global University’ initiative aimed at attracting increased numbers of international students. In total, there are c.97,000 total students (4,700 international) within the immediate catchment area of the property.
The development will provide high quality and innovative room design and layouts that have been created bespoke by GSA in tune with the Tokyo market. It will also have large communal areas, a theatre room, study space, barbecue area and other shared facilities to engender a sense of community that is lacking across many other forms of accommodation in the market. Customers will pay a simple, all-inclusive rent and there will be an emphasis on international customer service (including bilingual concierge).
This project provides the platform of a wider strategic partnership between the GSA Group and the Star Asia Group to create and manage 20,000 beds for university students in Japan. This follows the near-three-year presence of GSA in Tokyo, building a team on-the ground, developing local partnerships and gaining a thorough understanding the higher education sector. Coupled with Star Asia Group’s local experience and relationships, this partnership gives investors unrivalled underwriting experience and risk management in what is one of the most un-tapped global markets for student accommodation.
- 766,363 students in the 23 wards of Tokyo with c.500,000 in central Tokyo. By comparison, London (Europe’s largest student city) has c.290,000 full time students).
- 94 Universities and a total of 122 Higher education institutions in the greater Tokyo area.
- The largest ten universities account for 330,000 enrolments.
- 138,000 international students in Japan (c.43,500 in Tokyo).
- In Tokyo, approximately 34,000 (80%) of international students are not living in purpose -built accommodation.
- Universities are keen to attract more international students through enhanced facilities and supporting the private sector in providing purpose built student accommodation.
- Significant number of university halls were built prior to 1981 and therefore do not meet current seismic regulations. This is a key concern for the universities with regards to reputation.
- The majority of universities have ‘outsourced’ accommodation support to local estate agents who have a very poor offering in comparison to the purpose-built student accommodation model established elsewhere.