When Charleston, S.C.-based Greystar Real Estate Partners acquired a portfolio of student housing properties in the United Kingdom last October, it gave the company a strong foothold in a foreign land.
The firm purchased a portfolio out of bankruptcy of 21 assets spread across London, Manchester, Leeds and Liverpool, managing 7,000 beds in the process. It was the company's first acquisition in the U.K.
Privatized student housing is picking up domestic steam, but the U.K.’s student housing market isn't quite as advanced as the industry here.
“The [U.K.] market has parallels to U.S. market 10 to 15 years ago,” says Mark Hafner, senior managing director for Greystar’s investment group. “Both the products and the operations just lag current standards in the U.S.”
The company is looking to acquire another 1,100 units in central London, and is also contemplating developing student housing, as well as conventional multifamily rentals, in the U.K. This could just be the beginning of much bigger overseas efforts for a firm that's grown as rapidly, and comprehensively, as Greystar has.
There have been some culture clashes though. Where Greystar focuses vigorously on providing residents with the highest customer experience possible, the U.K. student housing market isn't quite as competitive.
“In the U.K. market, they’ve operated for most of the last decade in the context of a market with a huge structural undersupply of student housing,” Hafner says. “And because there’s so much pent-up demand, operators don’t have to try as hard to sell up their properties, so there’s much less focus on the customer as a result.”
And there lays it biggest challenge, instilling its corporate culture and mindset in a new land. The company is recruiting heavily, but potential employees don’t have the same customer service mentality ingrained in them.
But it's U.K. venture has taught the company a lot too, particularly about serving different demographics. Greystar’s properties in the U.K. are home to a very diverse, global tenant base. Enrollment in U.K. universities consists of about 85 percent international students. In one of Greystar’s properties, there are students from 101 different nations, a stark contrast to U.S. universities, which host an average of just 6 percent of international students.
It’s something that will eventually permeate into the U.S., though, having greater implications for enrollment and student housing operation.
“U.S. international enrollment isn’t growing the same rate, but universities have realized the attractiveness in getting more diversity and an international student base,” Hafner says. “I think that will be a key driver of housing growth in the US market as well,” he adds.
-Linsey Isaacs is an assistant editor with Multifamily Executive magazine. Follow her on twitter @LinseyI to continue this conversation.