APG, Ivanhoe Cambridge Back Scape in $658M Aussie Student Housing JV

Australia’s largest owner and operator of student housing is about to move up a grade with Scape announcing today that it has formed a fresh A$1 billion ($658 million) joint venture with the Netherlands’ APG Asset Management and Canadian pension fund manager Ivanhoe Cambridge to add to its portfolio of 17,200 operational apartments.

With Scape having already set a target of 22,000 student beds by the end of this year, the joint venture is seeded with a 1,000-unit project at Melbourne’s Queen Victoria Market, near the University of Melbourne, as the company maintains its focus on creating purpose-built student accommodation (PBSA) in urban locations close to Australia’s top universities.

“The strategy to develop and operate PBSA properties in key gateway cities in Australia is entirely in line with the urbanisation megatrend, which also aligns with our sustainability aspirations,” APG head of Asia Pacific real estate, Graeme Torre said in a release. “The PBSA sector is often considered the entry level for young renters in the residential sector and as a consequence helps address important issue such as housing affordability and availability.”

APG had backed Scape’s earlier development joint ventures, which were established in 2015 and 2018, with Ivanhoe Cambridge having committed $649 million to the company’s core strategy in 2022.

Record Student Enrollments

“This investment allows us to participate in the institutionalization of the living sector in APAC and support the provision of well-managed, high-quality housing for students,” said George Agethen, head of Asia Pacific for Ivanhoe Cambridge. “The exposure to this development JV complements our recent investment in Scape Core Program and will further diversify our APAC portfolio with defensive cashflows that are driven by the favourable demographics in the region and the demand for quality education in Australia.”

In January, international student enrollments in Australia reached a record 582,636, according to government figures, at the same time that vacancy for rental housing in the country’s core cities hovers at around 1 percent.

Scape sees development of purpose-built student accommodation under the new joint venture as helping to relieve pressure on the rental housing market, and providing safe and designed-for-purpose homes.

The company’s Queen Victoria Market project is part of an A$1.7 billion development which received formal planning approval from the Victorian state government in late March, just one week after Scape, Lendlease and the City of Melbourne signed off on the urban regeneration effort. Construction is expected to begin in the coming months with completion set for the 2028 fiscal year.

Returning Partners

Founded by Stephen Gaitanos and Craig Carracher in 2014, Scape predicts that the explosion in students flocking to the Australia’s major cities over the past ten years is set to continue over the next decade which, alongside a structural undersupply of rental housing and affordability constraints, presents an opportunity for the joint venture.

“We are excited to have high calibre global investors APG and Ivanhoe Cambridge partner with us again in the PBSA sector, for our third develop-to-core JV, following the successful journey we have been on for purpose-built student housing over the past 10 years,” Gaitanos said. “This comes at a very exciting time with our current portfolio at full occupancy and a clear need for more well designed and located rental accommodation in Australia.”

With 10 purpose-built student housing and urban living assets under development set to add to its 36 operational properties, Scape has acquired 22 major project sites since establishing its first development joint venture in 2015.

Having built a team of more than 700 staff, including in-house development, design and operations teams, the company promotes its ability to invest in systems, technology, and security which provide an institutional grade living setting for its tenants and reliable returns for investors.

“Our ambition is to democratise the rental market for students and other renters alike by leveraging our operational scale and delivering inspired intelligent design experiences at value,” Scape’s Carracher said. He added that, “Built on decades of developing and creating living design experiences, our Rent-to-Live model leverages efficiencies of scale and a proven track record of successful place-making and built environments purpose built for the leasing consumer.”