ARTICLE
24 November 2022

EduInfra – Emergence Of A New Asset Class

RP
Resolut Partners

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We are specialised transactional lawyers mainly focused on investment funds, private equity and M&A. Our core specialism is to advise on every aspect across the lifecycle of a fund – from formation, investments, structured transactions, governance issues (fund and portfolio level), to exits and commercial disputes.
EduInfra is attractive to international annuity investors looking for stabilized yield plays.
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In this article, we explore an emerging sub-set of infrastructure which is garnering increasing amounts of interest from global private equity and pension funds – Educational Infrastructure or 'EduInfra'. EduInfra refers to the infrastructure, building and land used to deliver social services like education.

EduInfra is attractive to international annuity investors looking for stabilized yield plays. The sector has an edge over other similar asset classes due to its non-GDP linked and rather recession proof character with significant potential for capital appreciation. It offers a promising 10 – 11% entry cap rate with rental escalations in the region of 3 – 5%. While the market boasts of significant depth, potential has not been unleashed as operators are only slowly moving towards asset light models. EduInfra's classification as infrastructure allows for tax optimal exit through InvITs which can also serve as a growth platform attracting institutional investors.

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