GIC, Greystar Cleared to Buy UK Student Housing Provider After Regulatory Snag

A UK regulator has cleared the proposed acquisition of Student Roost by Singapore sovereign wealth fund GIC and US developer Greystar after the deal was investigated over concerns that it could reduce competition among student housing players in one of Britain’s key markets.

The Competition and Markets Authority had been looking into the potential for the deal to cut competition among student accommodation providers in Birmingham, where the Greystar-GIC joint venture already has significant holdings, potentially resulting in higher prices and lower-quality services for students.

To resolve the issue, the Greystar-GIC JV has agreed to sell one or both of Student Roost’s two Birmingham properties, The Heights and The Old Fire Station, which have a combined 1,392 beds.

In a decision published Monday, the CMA deemed the course of action “as comprehensive a solution as is reasonable and practicable” and said the merger would not be referred for further investigation.

Brookfield Portfolio

GIC announced in May that it had formed a joint venture with Greystar to acquire Student Roost, Britain’s third-largest student accommodation provider, and its 23,000-bed portfolio from a private fund managed by Canada’s Brookfield for an undisclosed amount.

In September, an investigation of the deal was launched by the CMA, which had jurisdiction to review the transaction because Student Roost’s turnover in the UK exceeds £70 million ($85 million).

“Many university towns and cities are already dealing with a student accommodation shortage, which is why it’s crucial that private providers like those involved in this deal are competing effectively,” Colin Raftery, senior mergers director at the CMA, said in November.

Once completed, the acquisition will also secure Student Roost’s 3,000-bed development pipeline for the JV. Student Roost was founded in 2017 and now has more than 50 properties in 22 cities across the UK.

High Marks for Asset Class

Student housing remains a high-conviction strategy for GIC, which earlier hooked up with British operator Unite Students and Dubai-based Global Student Accommodation Group on two separate investment vehicles.

GIC and Unite formed their LSAV joint venture in 2017 and announced their first investment in February of that year with the £227 million acquisition of a five-building, 3,067-bed student housing complex at Aston University in Birmingham. More recently, LSAV acquired two London properties for £342 million ($472 million) in a deal announced last June.

The Singaporean giant had previously partnered with Global Student Accommodation Group in 2016 to buy a portfolio of UK student housing projects from funds managed by Oaktree Capital Management. No sales figures were disclosed, but the assets were expected to be worth £700 million when completed.

In June, GIC and Dutch pension fund manager APG announced plans to acquire what they termed a “substantial” stake in Amsterdam-based The Student Hotel, in a deal valuing the hybrid student hostelry operator at €2.1 billion ($2.2 billion).

For Greystar, the second-largest student accommodation provider in the US (after American Campus Communities), the anticipated deal with GIC adds to a portfolio of over 120,000 student beds globally for the South Carolina-based developer.