CMA warns against low-quality student digs following merger

The Competition and Markets Authority (CMA) has said the purchase of student accommodation provider Student Roost could lead to higher rent and lower quality housing for students in Birmingham.

The £3bn acquisition of Student Roost by Singapore sovereign wealth fund GIC and Greystar has been assessed by the CMA in cities where all three firms have a significant combined presence. Student Roost’s portfolio comprises of more than 23,000 beds in key cities, especially ones with Russell Group universities.

The CMA found the acquisition would not lead to competition concerns in most cities because the combined businesses would continue to face sufficient competition from other accommodation providers. But in Birmingham, the CMA found that the combined businesses would not face enough competition across several university campuses, potentially resulting in higher prices and lower quality services for students.

GIC, Greystar and Student Roost have accepted the acquisition could raise competition concerns in Birmingham and intend to offer remedies to fully address them. The CMA expects to receive their formal proposal within the next 5 working days. Provided the proposed action plans addresses the CMA’s concerns, the merger will be cleared without the need for an in-depth phase 2 investigation.

Colin Raftery, Senior Mergers Director at the CMA, said: “Aside from fees, rent is the biggest expense students face, and the rising cost of living is putting even more pressure on student budgets.

“Many university towns and cities are already dealing with a student accommodation shortage, which is why it’s crucial that private providers like those involved in this deal are competing effectively.

“We’re concerned this deal could result in students in Birmingham seeing higher prices or lower quality services. GIC, Greystar, and Student Roost have accepted our concerns and have told us that they plan address them. A solution that fully resolves our concerns will avoid the need for a more in-depth investigation.”