Mapletree Raises $535M for Student Housing Trust

Fuse, a student housing development at Purdue University owned by Mapletree’s private trust

After buying up a global portfolio of $1.3 billion in student housing, Singapore’s Mapletree Investments has raised $535 million for a private student accommodation trust, giving institutional investors a stake in its cache of dorms and apartments.

The student housing assets that Mapletree acquired last year in the US and the UK have been injected into The Mapletree Global Student Accommodation Private Trust (MGSA P-Trust), which is now backed by investors including Great Eastern Life Assurance Company, DBS Bank and UBS AG.

Said to be the first of its kind, Mapletree contends that the privately traded trust is superior to a public-listed vehicle. “Opting for the private track also allowed us to bring the product to market quickly, and is more cost effective to set up and operate on an ongoing basis, without the lengthy process to launch an IPO and the increasing compliance costs to maintain a REIT,” said Mapletree group CEO Hiew Yoon Khong in a statement.

And Hiew indicated that his Temasek Holdings-backed real estate investment and development company plans to duplicate this model in other industry verticals. “We entered the segment on the belief that it is scalable. We want to scale this business to be a lot bigger, so our approach is to create, over time, a series of private trusts,” Khong said.

Spinning Student Beds into Gold

Mapletree CEO Hiew Yoon Khong is banking on student housing

When Mapletree went shopping for student housing last year, it targeted facilities completed within the last three years, at institutions with high enrollment with a compounded annual growth rate of more than two percent over the last decade.

Already on the list of assets for MGSA P-Trust are ten student housing projects in the US, for which they paid $291 million for 8,363 beds, and 25 UK assets which cost $522 million for 5,910 beds. Mapletree will maintain a 35 percent stake in the trust, which has a term of five years with a provisional year extension.

“In the case of MGSA P-Trust, investors will be able to reap strong returns from an asset class proven to be relatively anti-cyclical in nature, with the pursuit of higher education growing worldwide even during economic downturns,” Hiew said.

The trust’s current holdings are found in 22 different cities across the US and UK and total more than 14,000 beds.

Singapore’s Student Housing Mania

While the MGSA P-Trust may be the first of its kind, it’s not the only Singapore entity vying for that sweet, sweet student housing. Just last week GIC, another Singaporean sovereign wealth fund, joined in a joint venture with Canada’s CPPIB to agree to invest $1.6 billion in student housing.

Under the auspices of the Scion Student Communities, GIC and CPPIB acquired three student housing portfolios composed of 29 assets last week, bringing their total to 48 student housing communities comprising 32,192 beds. The three parties involved in the Scion Student Communities joint venture have inked $2.9 million in investments in just over a year.