Metro-Backed Vehicles Bag 4 UK Student Housing Assets, Aussie Mall for $144M

A fund backed by Singaporean property group Metro Holdings has added four more UK student housing assets to its portfolio, while a Metro joint venture with Lion City builder Sim Lian Group has become the latest Asian buyer of an Australian neighbourhood mall.

Metro’s student housing fund, Paideia Capital UK Trust, acquired the four freehold student accommodation properties in Exeter, Durham, Glasgow and Kingston for a total consideration of £74.4 million ($84.5 million) in a deal completed in May, the group said Monday in a release. The sellers were identified as Jersey-incorporated offshore companies.

“The completion of these four acquisitions during this volatile period is testament to the capability of the joint venture partners,” said Metro group CEO Yip Hoong Mun. “These acquisitions mark Metro’s continued strategic partnership with Lee Kim Tah Holdings Limited and Woh Hup Holdings Pte Ltd to further diversify for resilience in the UK.”

In Australia, Metro is acquiring Shepparton Marketplace, a neighbourhood retail centre in Victoria state, just one week after Hong Kong’s JY Group picked up the Carlingford Court shopping centre outside of Sydney, as Asian investors help to rekindle trades of mall assets in the country.

17th Property Down Under

To put its latest retail acquisition in the cart, Metro and Sim Lian travelled to Shepparton, a town just under 200 kilometres (124 miles) north of Melbourne, to pick up the freehold shopping centre from Dexus Wholesale Property Fund for a total consideration (including stamp duty and acquisition costs) of A$92 million ($59.7 million). The retail centre has an occupancy rate of 97.3 percent and a weighted average lease expiry of 4.1 years by income.

With Sim Lian taking a 70 percent stake in the JV to Metro’s 30 percent, the mall in Victoria’s northern reaches has a gross lettable area of 16,535 square metres (177,981 square feet). Based on the property consideration of A$88.1 million, the Singaporean partners paid A$5,328 ($3,454) per square metre of GLA, with the acquisition bringing the JV’s portfolio to a total of 17 assets Down Under.

Included in that batch of properties are four office buildings and 13 retail centres spanning the states of New South Wales, Victoria, Queensland and Western Australia, with a total appraised value of A$1.2 billion ($780 million).

Dexus Wholesale Property Fund was represented in the Shepparton disposal by CBRE’s Simon Rooney and James Douglas. According to the brokers, the mall benefits from its highly accessible Midland Highway location and proximity to national retailers like Bunnings, The Good Guys, Anaconda and Spotlight, drawing shoppers from a broad catchment area.

“The centre is situated in an expansive, densely populated trade area with a substantial retail expenditure pool, which is forecast to grow from A$1.9 billion to A$3 billion by 2036,” Rooney said. “The centre is also set to benefit from the Shepperton Southeast Precinct Structure Plan, which proposes an additional 2,500 dwellings for the catchment area, accommodating circa 6,000 residents.”

The mall’s 122,900 square metre site includes 61,700 square metres of vacant land, providing scope for future development opportunities.

Global Portfolio Grows

Metro’s addition of the four student accommodation assets to Paideia Capital UK Trust brings the fund’s total portfolio value to £130 million ($148.2 million).

Metro holds 30 percent of Paideia Capital UK Trust through a wholly owned subsidiary, Sun Capital Assets, while the remaining 70 percent stake is held by developer Lee Kim Tah Holdings, investment manager Aurum (a subsidiary of Woh Hup Holdings) and a third party. The latest buys bring the fund’s student housing assets to a total of six after acquisitions in Bristol in 2021 and in Coventry in 2020, with the set of properties averaging a 99.2 percent occupancy rate as of June.

The fund had an initial aggregate committed capital of £60 million upon its first closing. It aims to increase the portfolio size to £150 million with the continued acquisition of purpose-built student accommodation assets in Britain.