Greystar Agrees to Buy GIC-Wee Hur Aussie Student Housing for Over $1B

US multi-family giant Greystar has agreed to buy seven Australian student housing properties from a joint venture between Singaporean developer Wee Hur Holding and sovereign fund GIC for A$1.6 billion ($1.01 billion), confirming earlier reporting by Mingtiandi.

The acquisition of the 5,662-bed portfolio marks Greystar’s entry into Australia’s purpose-built student accommodation (PBSA)  market and it’s largest acquisition in Asia Pacific to date, with the company pointing to the strength of the student housing market Down Under as sparking the deal.

“Australia’s student housing sector is experiencing strong demand, driven by its world-class education institutions, a growing international student population, and an undersupply of institutional-quality housing,” said Greystar executive director of investment management for Asia Pacific Adam Pillay,

Greystar sees the properties in Sydney, Melbourne, Brisbane, Adelaide, and Canberra bringing together a student housing portfolio already established in the company’s other regions as the sector expands in developed markets worldwide.

“It (the acquisition) represents the final step in rounding out our Global Student Accommodation footprint that comprises over 110,000 beds across North America and Europe prior to the transaction,” Pillay added. The deal expands Greystar’s assets under management in the region by a third to $4 billion across Australia, Japan and China, he noted.

Global Unity

Following completion of the acquisition, which is expected to take place within six months and requires Greystar obtaining approval from Australia’s Foreign Investment Review Board, according to a statement by Wee Hur, the South Carolina-based firm expects to upgrade the properties to add value.

Greystar plans to bring the portfolio under similar branding and design architecture as its  European and US properties and sees opportunities for asset enhancements, “which will enhance the overall amenity and service offerings for the residents in line with our brand strategy,” Pillay said.

Pointing to similarities in the resident demographics underlying its UK and Australian PBSA properties, Greystar said it will look to leverage its operational capabilities to improve the offering for residents in the portfolio in the near term.

With the company having last month opened Australia’s largest built-to-rent property, an A$500 million, 700-unit development in Melbourne, Greystar sees opportunities to further expand its student housing investments in the country.

“We are excited to broaden our footprint in Australia, and will continue to be active players in acquiring and developing PBSA properties across the key university markets,” Pillay said.

Wee Hur Stays In, Branches Out

Under the terms of the deal, which was signed on 15 December, Wee Hur will retain a 13 percent equity interest in the new ownership, and will receive net proceeds of S$320 million ($237 million), following adjustments, the SGX-listed company said in its statement.

The deal involves the 100 percent sale of all property sub-trusts by the joint venture holding the portfolio in which GIC holds a 49 percent stake. The sovereign fund had yet to respond to inquiries from Mingtiandi by the time of publication.

“This divestment highlights Wee Hur Capital’s exceptional ability to execute its strategic vision and deliver superior returns for its investors, regardless of market conditions,” Wee Hur Capital chief executive Goh Wee Ping said in a statement. He added that, “We look forward to a new partnership with Greystar and its co-investors.”

Having begun assembling the student housing portfolio in 2015, Wee Hur says it will reinvest the proceeds of the sale in its core business as well as to expand into alternative investment and other new areas.

“With consecutive successes in the PBSA business, Wee Hur continues to leverage its honed expertise to identify and seize opportunities in this sector,” the company said. “This proven track record highlights the Group’s ability to adapt strategically, maximise value, and capitalise on market trends within a rapidly evolving real estate landscape.”

Among the areas targetted for new investments are Wee Hur’s KK39 venture capital, private equity and private credit unit as the company looks to diversify its portfolio.