Mapletree Boosts Student Housing Portfolio to $1.6B With 3rd American Acquisition

Mapletree is plowing more capital into student housing overseas, buying a portfolio of eight US and Canadian assets from Kayne Anderson Real Estate Advisors, the Singapore-listed developer and investor announced on Friday. Financial terms were not disclosed, but the deal marks the third in a series of acquisitions by the Singaporean real estate developer and investor from the US firm.

The set of purchases, which total $1.6 billion since November last year, combine to make one of the largest buying streaks of student housing globally, according to a statement from Mapletree.

Picking Up Another 5,000 Housing Units

The newly purchased properties include 3,611 beds in the US and 140 beds in Canada, as well as four multi-family assets containingg 1,388 units in the US. The student housing serves public universities across the northeast, southeast, midwest and mountain states of the US, as well as Montreal in Canada. The assets are “purpose-built, well designed and have strong occupancy above 90 percent,” according to Mapletree.

The latest deal brings the former industrial developer’s portfolio to 12,000 beds of student housing based in 17 assets across 16 US cities. Globally, including assets held by its Global Student Accommodation Private Trust, Mapletree’s total student housing portfolio includes 43 assets with 18,024 beds in the US, Canada and the UK.

Mapletree Still Sees Upside in America’s Students

College enrollment in the US peaked at more than 21 million students in 2010, and has been falling every year since, according to the latest government data. Despite this, Hiew Yoon Khong, Group CEO of Mapletree, cited “growing university enrolment rates” as a demand driver for student housing.

“This sector is still under-served and we see opportunities as there is a gap between enrolment and total supply of purpose-built student housing,” commented Hiew. “We intend to scale up in this sector globally including in Australia and continental Europe, aside from the UK and the US.”

Mapletree first went shopping for student accommodation last year, picking up a seven-asset portfolio from the real estate private equity arm of Kayne Anderson in November 2016. The Singaporean firm bought another three properties from the Los Angeles-based firm this past May.

In March, Mapletree raised $535 million for a private trust, said to be the first of its kind, giving institutional investors a stake in its growing portfolio of student housing facilities. The Mapletree Global Student Accommodation Private Trust (MGSA P-Trust) is now backed by investors including Great Eastern Life Assurance Company, DBS Bank and UBS AG.

The acquisitions come as the Temasek Holdings subsidiary sees record-breaking financial success. The state-backed firm recently reported a 46.5 percent jump in net profit for the financial year which ended this past March, hitting a record high of S$1.41 billion ($1 billion). Strong growth in overall revenue and recurring net profit was driven in part by earnings from the company’s overseas acquisitions in the US, UK, Australia and Vietnam.

Mapletree Part of a Student-Supporting SG Crowd

Mapletree is not the only Singapore-based investor betting on student housing. the country’s sovereign wealth fund GIC has scooped up a series of student housing projects overseas in the past year and a half, attracted by the diversification and relatively low volatility offered by the asset class. This past March, GIC agreed with Canada’s CPPIB to invest an additional $1.6 billion into student housing in the US via the Scion Student Communities joint venture set up over a year ago with Chicago’s The Scion Group.

In September 2016, the Singaporean fund partnered with Dubai-based Global Student Accommodation Group to buy a UK portfolio of student housing projects from funds managed by Oaktree Capital Management which are expected to be worth £700 million ($900 million) upon completion. In the same week, the investors partnered again on a 1,000-bed student housing joint venture in Germany.

According to data from Real Capital Analytics cited by Bloomberg, a record $16.2 billion of student housing purchases were made worldwide in 2016, with a further $3.3 billion being transacted in the first quarter of 2017.