Bahrain’s GFH acquires $300 million student housing portfolio in US

The Bahrain-based investment bank GFH Financial Group (“GFH” or “the Group”) on Thursday announced acquisition of $300 million student housing portfolio affiliated to select top-rated universities located in Texas, Michigan and Missouri in the US.

The acquisition is in partnership with GFH subsidiary Student Quarters, an Atlanta-based student housing specialist, the GFH said in a filing on Thursday to the Abu Dhabi Securities Exchange (ADX), where its shares are traded.

The five assets acquired include facilities near Texas A&M University, Michigan State University and Missouri State University. The portfolio has more than 2,000 beds with assets located within walking distance of their respective affiliated universities.

They are relatively new and include amenities designed specifically to cater to student needs such as swimming pools, courtyards, coffee shops, study lounges, clubhouses, game rooms and fitness centres.

GFH’s investment strategy in the student housing sector focuses on building a diversified portfolio that targets universities within the top public 150 universities in the US, which are considered flagship universities in their respective states.

These are institutions with proven pedigree, strong academic and sporting facilities and that have shown steady growth in enrolments year-on-year. The student housing sector has performed well historically, even during the pandemic, as evident by an average stable occupancy rate well above 90% and an equivalent high rental collections rate.

Overall, the sector has witnessed supply shortages with the need for purpose built student housing assets that are within walking distance of Tier I institutions throughout the country spurred by rising enrolments and limited availability of University provided accommodations.

Tremendous Edge

In his comments, Nael Mustafa, Co-Chief Investment Officer – Real Estate at GFH, said, “As part of GFH’s growing real estate activities, we are delighted to continue our investment in the student housing sector, which is experiencing positive momentum given the rise in US university enrolment, the growing US population and scarcity of class-A pedestrian, purpose-built assets.”

He further said: “Our subsidiary Student Quarters also gives GFH and our shareholders a tremendous edge in this sector supporting value creation, alignment of interest and pure focus on achieving the targeted returns for GFH and its investors. They have an exceptional track record and experience and continuously rank among the top 25 student housing asset managers in the US.”

Stephanie Lynch, Chief Investment Officer of Student Quarters, said: “We are excited to be growing our portfolio by purchasing these high-quality, well-located assets in exceptional markets that are within close proximity to top tier universities. We look forward to continuing to deliver compelling

investment opportunities and demonstrate results.”

The GFH Financial Group’s shares were listed on the Abu Dhabi Securities Exchange (ADX) on 31 May 2022. This has been the fourth regional listing, with its shares already listed and actively traded on the Bahrain Bourse, Boursa Kuwait and the Dubai Financial Market exchanges.

Current GFH Financial Group shareholders will be able to transfer shares from existing markets where they hold shares to ADX.

Pursuing New Opportunities

With three regional and global offices, over $15 billion of assets and funds under management, increasingly diversified business lines and now becoming the first issuer to be listed across four GCC stock exchanges, GFH is continually pursuing new opportunities to maximize value generation for its investors and shareholders.

GFH has been focusing on international expansion. It set up its US operations in May by acquiring a majority stake in SQ Asset Management, which focuses on student housing.

GFH has an investment portfolio that spans the Middle East, the US, the UK and Asia in a number of sectors, including health care, education and logistics. Last year, it closed more than $1 billion worth of new investments in those segments, with its assets growing by about 23% to $8.08 billion at the end of 2021.