Singapore-listed Far East Orchard’s first UK student accommodation fund has initially raised £70 million (€82.5 million) of its £100 million target.

The UK arm of the property investment fund, Far East Orchard Investments UK, has committed £35 million to the FE UK Student Accommodation Development Fund (FESAD), which has been endowed with a building site the group purchased in Glasgow in March this year.

The construction of a student dormitory with 273 beds is planned on the site.

Alan Tang, Group CEO of Far East Orchard, said the establishment of a FESAD fund for purpose-built student accommodation (PBSA) in Singapore is an important cornerstone for Far East Orchard.

“Having been active in the UK PBSA business since 2015, we have built a reputation in the market and remain confident in the sector given the strong fundamentals, robust student demand and structural gap between supply and demand.”

He added that in April this year, Far East Orchard acquired a 49% stake in Homes For Students, the UK’s largest independent PBSA operator, enhancing the operational management capabilities of the Group’s PBSA business and strengthening its position in the PBSA sector in the UK.

“Entering fee-based investment management is a natural evolution of our current fee-based operating model to leverage our investment and asset management capabilities in the UK PBSA business,” Tang said.

“This will enable the Group to increase its recurring revenue streams as it moves towards an asset-light business model, ultimately reducing its balance sheet burden and creating greater sustainable value for shareholders.”

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