Gaw Capital has agreed to acquire a 20,000 square metre office property in Perth, Australia for conversion into a 500 bed student housing facility, according to an announcement this week by the Hong Kong-based real estate private equity firm.
While Gaw did not disclose the compensation paid to the building’s current owners for the eight-storey property at 80 Stirling Street, local press reports put the price at approximately A$35 million ($26 million). US private equity firm Corval, together with a local fund manager, paid A$72 million to acquire the property in 2013.
The Aussie acquisition is Gaw’s first since the fast-rising, family-run firm raised a $151 million fund targetting assets down under in October this year. Gaw has not indicated the source of the funds for the acquisition.
Gaw Leverages Hospitality Expertise for Student Housing Project
Formerly the local headquarters for telecom firm Telstra, Gaw aims to add value to the property by converting it for student housing purposes.
“Education is already one of Australia’s biggest export earners and there continues to be strong growth in the number of international students arriving in the country,” said Kenny Gaw, Managing Principal and President of Gaw Capital Partners. “Perth has not focused on this growth area during previous economic cycles, but our advisor DevWest recognised the significant opportunity in the market and was one of the first market players to act.”
Last year Gaw launched its first student housing project in Hong Kong, Campus HK. In addition to developing that co-living project, the firm has extensive holdings in hospitality assets, including operating its own Hotels G brand, with hostelries in Bangkok, Beijing, Hong Kong and San Francisco, as well as several other cities in Asia.
Student Housing Becomes a Thing
As rising assets make traditional real estate investment sectors such as commercial offices less appealing, fund managers and other investors have increasingly turned to student housing for higher investment yields.
In October this year Singapore’s sovereign wealth fund, GIC, invested $900 million into a portfolio of student housing in the UK, and doubled down on that bet just a few days later by acquiring 1,500 beds’ worth of student accommodation in Germany.
Singapore’s Mapletree is also banking on university students to spice up its portfolio after the real estate investor and developer invested a reported GBP 417 million ($527 million) into facilities in the UK during March. The Temasek-invested firm took that same investment thesis to the US in early November, agreeing to buy seven housing facilities at major US universities totalling nearly 6,000 beds.