GIC and partners acquire more US student housing properties for US$1.1b

GIC and partners acquire more US student housing properties for US$1.1b

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8N Lofts at University of Nebraska. (Photo: GIC)

SINGAPORE: GIC, along with two partners, has acquired another US student housing portfolio for about US$1.1 billion. the Singapore sovereign wealth fund said in a media release on Wednesday (Jan 3).

The portfolio consists of 24 assets located on 20 university campuses across the US, comprising 13,666 beds.

The portfolio represents a mix of recently developed Class-A properties in primarily tier-1 university markets as well as select value-added assets, GIC said.

Since its inception in January 2016, Scion Student Communities -GIC's student housing joint venture with the Canada Pension Plan Investment Board (CPPIB) and The Scion Group - has completed more than US$4 billion of investments. 

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Lux on Capitol at IUPUI. (Photo: GIC)

CPPIB and GIC each own a 45 per cent interest in the newly acquired portfolio while Scion Group owns the remaining 10 per cent.

“This is a compelling investment opportunity to efficiently build further scale in the US student housing sector with a portfolio of high-quality, well-located properties in new and existing joint venture markets,” said Ms Hilary Spann, managing director, head of Americas, real estate investments, CPPIB. 

“We believe the secular strength of the US student housing sector will continue to deliver attractive risk-adjusted returns for the CPP Fund, and we look forward to continue growing the joint venture with GIC and Scion.”

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Dinkytown at University of Minnesota. (Photo: GIC)

The joint venture’s national portfolio now includes 73 student housing communities in 52 top-tier university markets, with 46,555 beds. 

Mr Lee Kok Sun, chief investment officer of GIC real estate, said: “As a long-term investor, we are pleased to acquire this quality portfolio with good cash yields. We remain confident in the student housing sector, and in our partnership with Scion and CPPIB which has enabled us to scale-up quickly our US student housing portfolio. We will continue to work closely with our partners to pursue value opportunities in the US.”

The joint venture will continue to pursue additional opportunities to acquire high-quality student housing assets primarily in tier-1 university markets in the US.

“This transaction is particularly strategic, providing for the addition of six properties in markets in which our joint venture already has a presence. This is consistent with our strategy to concentrate our investments in targeted markets by owning multiple properties with diverse product types and rental price point options,” said Mr Robert Bronstein, Scion’s president.

Source: CNA/hm