Singapore’s Cambridge RE Buys Second Aussie Education Property in Three Months

Singapore fund manager Cambridge RE Partners has made its second purchase of an Australian educational property in three months with its acquisition of a 592-bed property near Sydney, according to an announcement by the firm.

On behalf of its Cambridge Social Infrastructure Fund, the company acquired the Hastings Village purpose-built student housing asset next to the campus of Charles Sturt University from an unspecified local developer for A$116 million ($75.5 million), according to a statement by investment manager Centennial, which assisted in the transaction.

“We are delighted to have introduced Cambridge to this modern, purpose-built student accommodation asset that had strong defensive characteristics underpinned by a 20-year lease, with annual CPI reviews,” Centennial managing director and group chief executive Adrian Taylor noted in the statement, with the deal having closed last month.

Cambridge RE’s acquisition in Port Macquarie, a coastal city around 400 kilometres (249 miles) north of Sydney, came after the company had in late January acquired a classroom educational facility in Sydney’s Waterloo suburb for A$87 million, bringing the Singapore firm’s commitments to the sector to more than A$200 million in three months.

Two Education Assets in First Quarter

The Cambridge’s latest pickup is Hastings Village, a set of 13 buildings completed in phases from 2017 through the beginning of this year. In addition to its proximity to the university campus, the property is located less than five kilometres (3.1 miles) from Port Macquarie’s medical precinct.

With his firm having launched the Cambridge Social Infrastructure Fund in the fourth quarter of 2023 to invest in education and healthcare real estate assets in Australia, Cambridge chief executive officer Enoch Tan in a statement last week touted the acquisition as a “good fit with the fund’s strategy” of building a portfolio of education and healthcare real estate assets across the country.

Tan said in that statement on LinkedIn at the time of the first acquisition under the strategy, that “its core thesis (is) centered upon the growing demand of private education (driven by strong population growth) and healthcare services (driven by an aging population) in Australia.”

Centennial, which has A$2.1 billion in assets under management, sourced the deal off-market for Cambridge, with the local firm set to assist in managing the property.

Cambridge’s first Aussie education acquisition was Taylors House, an 11,000 square metre (118,400 square foot) property at 965 Bourke Street in Sydney, which is largely leased to Taylors College Sydney, a private prep school.

Taylors House is currently 100 percent occupied with a weighted average term to lease expiry of six years, according to an earlier social media post by Kate Low, head of international capital for  JLL in Australia and New Zealand, which advised on the transaction along with Colliers.

Cambridge invests in real estate assets supported by demand for education, healthcare, logistics and renewable energy in Southeast Asia and Australia, according to the company’s website.

The firm’s chairman,Michael Dwyer, had served as executive chairman of the primary sponsor of Cambridge Industrial REIT in Singapore, before the company was acquired by ESR and later merged into what is now ESR-Logos REIT.

Filling Student Housing Gap

With Australia having reopened its doors to foreign students after the pandemic, at the same time that the country faces record low vacancy in its rental housing sector, global investors have been upping their bets on student housing in the country.

Last month, Brookfield Asset Management lodged plans to build a 39-storey student housing complex in Melbourne, with the Canadian giant announcing that deal shortly after Singapore builder SLB Development applied to build a 400-bed PBSA project in the city’s Flagstaff precinct in January.

In the 12 months ending June 2023, international students accounted for more than half of the 554,000 travelers arriving in Australia on temporary visas, according to the most recent government data.

In a report earlier this year, property consultancy JLL estimated that Australia faces a shortfall of 7,000 student beds each year over the next five years as the pipeline of projects fails to keep pace with the surge in arrivals of international students.