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Student Cribs recently announced the complete committed investment of their second fund of £34 million. The fund, which was invested into 100 student houses, takes the Student Cribs portfolio up to 150 student homes (cribs) and 819 bed spaces.
The property start-up, which aims to redefine student living, expects the portfolio to produce a stabilised gross yield in excess of 9% and produce a cash-on-cash net yield in excess of 6.5% for investors. A group of high net worth individuals invested between £500,000 and £2m in the fund.
Most of the fund has been invested in the major student locations of Nottingham, Manchester, Leeds, Liverpool, Exeter and Durham. Student Cribs is now concentrating on Fund Three, where they are aiming to raise £30 million of equity which will be levered to £60m. Raised in 2010, Fund One came to £11m including debt.
“We are delighted to have fully committed Fund Two and are excited to be working towards further expansion,” Charlie Vaughan-Lee, founder and CEO of Student Cribs, commented. “The success of Fund Two really validates the scalability of Student Cribs model and as a result we are looking to discuss larger capital investment with institutional investors for Fund Three.”
He added: “To date, investors have focused on the development of “purpose built student blocks” for first year students, which has been a good market but is looking saturated now. In contrast our product is sought after by students in their second, third and fourth years of study. By providing attractive houses (rather than institutional blocks) we are enabling the investment market to gain exposure to the rental roll of an additional 1.5 million students.”


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