By Florence Chong (IPE Real Assets)
March/April 2025 (Magazine)
From early mover to a multi-part business spanning the globe, The Dot Group is seeking further growth and has the capital to achieve it, Steve Grant tells Florence Chong.
When the current universe of international students runs into many hundreds of millions, wanting to capture just one million students does not sound overly ambitious. But more than three decades after the sector first emerged as an investment asset class, no provider of student accommodation has hit that magic number – yet.
One ambitious global operator, The Dot Group, has its sights firmly fixed on housing a million students on its platform in the coming years.
Today, around 80,000 students live in purpose-built student accommodation (PBSA) under The Dot Group’s umbrella in 14 countries. Many more access beds listed on its digital platform, which extends Dot’s reach to over 35 countries.
The Dot Group, founded by Nick Porter, has set high bars for itself in what is becoming an increasingly competitive market. Porter launched Unite Students some 30 years ago before listing it on the London Stock Exchange. In 2013, he founded Global Student Accommodation (GSA).
Four business lines
Porter has created an ecosystem with four lines of complementary activities to feed off synergies from each of the businesses.
GSA, the real estate investment management arm, manages US$7bn (€6.75bn) of assets. These are operated by Yugo, the global student housing brand and manager overseeing a portfolio of 100,000 beds (including pipeline) – made up of GSA-owned beds (around 50,000), with the balance being third party-owned.
More recently, it has added Kinetic Capital, a specialist student housing lender providing investment and development finance to other investors in the field. After several UK transactions, Dot recently made its first loan in Italy and is working through “a pipeline of more than US$1bn in active deals”. Says Steve Grant, Dot Group’s chief commercial officer: “We have capital available to fulfil those deals and to grow this business significantly.”
Finally, Dot runs an online marketplace, Student.com, with more than 2.5m beds spanning over 30 countries listed on the platform. As the market expands, more smaller operators are likely to seek exposure through Student.com.
“These businesses work closely together, leveraging off relationships, networks, expertise and data from each other,” says Grant, who was GSA’s chief executive officer before launching Kinetic Capital for the group in 2020.
“Our vision at The Dot Group is to serve a million customers,” he states. “The opportunity to grow significantly is absolutely there. We focus on growth in all the regions in which we are active.”
Grant, who has worked with Porter over the past three decades, points to The Dot Group’s US operations as an example of what is possible. “We entered the market in 2021. We are now a top-10 player and we expect to be among the top-five players over the next several years. There is considerable opportunity for consolidation and acquisition in this market, and we can definitely see us increasing our business fivefold at least.”
GSA and Morgan Stanley Real Estate Investing (MSREI) jointly formed an open-ended student housing venture to invest in the US market in 2021. GSA seeded the vehicle with US$1.6bn in assets, and the portfolio has been acquiring more since then.
Although GSA is long established in PBSA in the UK, Grant says the group still sees opportunity to grow. It expanded into Germany in 2016, backed by Singapore’s GIC, moving quickly into Spain in 2017 before making its debut in Italy last year. “GSA currently manages assets worth US$7bn, and our ambition is to take that to over US$10bn in the next couple of years,” says Grant.
Last April, The Dot Group acquired Corestate’s CRM Students platform, which manages 26,000 beds, and when combined with Yugo, became Europe’s largest student housing operator.
In Asia-Pacific, the group is active in Japan. Grant acknowledges that Japan is not an easy market as an overseas business, but says: “It is a massive market. Tokyo has a million students, one of the biggest student markets globally.”
The company was an early mover in Australia, entering the market at the dawn of the industry in 2007. Today, it runs properties in three cities – Melbourne, Adelaide and Perth. “We are aiming to build up our business in Sydney and Brisbane over the next few years, and we plan to grow our Yugo brand significantly in Australia,” he says.
Aside from Australia and Japan, The Dot Group manages a student and academic facility for Tsinghua University campus in Beijing. Grant says: “It is not a market we are currently focused on from an investment perspective, but it is certainly a market that we like, and we could be doing more in China.”
Branding and funding
Since launching its Yugo brand in 2021, the group has been gradually standardising the branding of its student-bed portfolio, including the CRM portfolio, around the world.
The group’s growth will be funded from its balance sheet and with institutional capital. “We have two main sources of capital,” explains Grant. “Our discretionary capital through GSA Coral, a billion-dollar fund, and capital from a wide range of institutional capital partners.”
One of Dot’s earlier partners was GIC, Singapore’s sovereign wealth fund, which backed many of its acquisitions in the UK and Europe.
In December, GSA formed a joint venture with Nuveen Real Estate – on behalf of its parent company TIAA – to acquire the YouFirst Campus portfolio in France from Gecina for around €540m.
Grant says a key change over the past 30 years has been the considerable growth in student numbers. “Globally, there are now more than 300m students, many of whom are looking to take English-language university courses.
“The expectations of those students have changed, and the service offering has changed significantly over that period to meet the expectations of Gen Z, and soon to be Gen Alpha. It used to be a bed, and any other facility was an afterthought, but now it is a key part of the student experience – the ability to network, to work and to study.”
In line with the growth in demand, Grant says the number of markets in which purpose-built student housing has become a recognised asset class has further increased. “When we started out at Unite, there wasn’t a student housing asset class as such. Then, the number of players in the market was just a handful. Today, there are many more active players in most markets in which we have a presence.
“The other thing that has changed significantly is the investment market. In the early days, capital investors had no awareness or understanding of what PBSA was or how robust and resilient it was as an asset class. We had to try to convince investors that PBSA could offer good diversification to an investment portfolio. Clearly, that has changed. We now have many institutional investors seeking student housing as a key part of the living sector, globally.”
Growing investment class
Grant says PBSA is becoming a significant investment class, with £3-5bn (€3.6-6bn) in transactions taking place each year in the UK alone. The total size of the market is hard to ascertain accurately, but he believes it is worth well in excess of US$100bn globally,
adding: “That is only the private sector. If you add in the on-campus accommodation, it is the same size again.”
The commercial chief says the size of the global student market is increasing. In Yugo facilities, typically, at least a third of the residents are international students. “Over the past decade, there has been significant growth in Chinese and Indian students in particular, who have continued to be an important subset of our market. There is also strong growth in the domestic market driven by favourable demographics. We target a mix of international and domestic students.”
Generally, PBSA projects comprise well-designed, high-density buildings which can efficiently accommodate a large number of students. “This is recognised by many local and national governments, and they see us as a key part of resolving their wider housing shortage,” says Grant. “We really see our sector as part of a solution to help relieve some of the pressure on the general and family housing market in those markets where we operate.”
The group has been through many economic cycles over the past 30 years, and each cycle, including the pandemic, has reinforced the robustness and resilience of the asset class, he observes.
“Returns differ from area to area. Where we have taken additional risks in helping to establish a market, we see higher returns. The key reason that it is an attractive
investment is consistent demand, rental growth and high occupancy, typically over 90%.”
Asked about the impact of arbitrary regulatory interference, Grant is sanguine. “We adjust our global investment according to political cycles. They come and go. We are in all our markets for the long term. We are not a short-term tactical investor, and we believe firmly in all the markets we are in.
“Australia is an example where the current government is seeking to cap international student numbers. The industry, and more specifically international education, is worth A$50bn (€30bn) to Australia’s economy, and it does not make sense in the longer term because, strategically, the international student market is such an important economic driver for the country.”
Political decisions also affect the international student market in the UK, the US and some European countries. “Governments chop and change policies, but over time they realise the importance of higher education and international students to the overall economy.”
