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GIC enters joint venture to acquire US student housing portfolio

Singapore's sovereign wealth fund and the Canada Pension Plan Investment Board will each own a 47.5 per cent interest in the University House Communities Group, while operator Scion will own the remaining 5 per cent. 

SINGAPORE: GIC has formed a joint venture with Canada Pension Plan Investment Board (CPPIB) and The Scion Group (Scion) to acquire a US student housing portfolio for approximately US$1.4 billion (S$2 billion), the Republic's sovereign wealth fund announced on Monday (Jan 4).

Through the joint venture, GIC and CPPIB will each own a 47.5 per cent interest in the University House Communities Group (UHC). Scion, which will manage and operate the portfolio, will own the remaining 5 per cent. It added that the venture will also pursue opportunities "to acquire high-quality student housing assets primarily in Tier 1 university markets in the US". 

The transaction is expected to close in mid-2016.

UHC is one of the largest Class A national student housing portfolios in the US, with nearly 13,000 beds and concentrated among top-ranked universities with large student enrollment populations. 

GIC Real Estate's regional head for Americas, Mr Lee Kok Sun, said GIC expects UHC to generate steady cash flows moving forward: "Our confidence in the US student housing sector continues, given its positive fundamentals and potential."

He also said he believes GIC's experience investing in student housing in Australia and the UK "will add value to the joint venture". 

CPPIB's managing director Peter Ballon said he saw the portfolio as a "valuable opportunity to enter the US student housing sector with top-tier, well-located assets", while Scion's president Robert Bronstein described the partnership with the firms as a "wonderful opportunity" for the operator.