Lee Kok Sun, Chief Investment Officer, GIC Real Estate
Singaporean sovereign wealth fund GIC is ramping up its investment in shelter for America’s college students, joining with partners CPPIB and student housing specialist the Scion Group to buy a portfolio of housing projects across 20 university communities for about $1.1 billion.
The deal expands GIC’s joint venture with Canada’s largest pension fund manager and Chicago-based Scion, which has seen the trio complete $4.1 billion of portfolio transactions since January 2016. Roughly $1.4 billion in equity capital has been deployed by the Scion Student Communities joint venture.
Through the new investment announced this week, the team will acquire 22 properties totalling 13,666 beds from affiliates of Chicago-based Harrison Street Real Estate Capital and will recapitalise two projects previously owned by Scion-linked private vehicles. GIC and CPPIB each hold a 45 percent stake in the bundle of assets, with Scion owning the remaining 10 percent.
GIC Settles into US Student Bedrooms
“As a long-term investor, we are pleased to acquire this quality portfolio with good cash yields,” commented Lee Kok Sun, Chief Investment Officer of GIC Real Estate in the statement. “We will continue to work closely with our partners to pursue value opportunities in the US.”
The newly acquired portfolio includes the Atmosphere community at the University of Arkansas
GIC kicked off the partnership with Canada Pension Plan Investment Board (CPPIB) and Scion two years ago by scooping up a 13,000-bed US student housing portfolio for $1.4 billion. The partners followed that up with a $1.6 billion acquisition of three more portfolios in the country in March of last year.
Scion Student Communities now holds a diversified network of 73 student residence projects with 46,555 beds across 52 university markets in the US. The properties have an average effective age of less than five years and are mostly located within one mile of campus. The latest acquisition includes recently developed grade A properties around top-tier institutions such as the University of Nebraska, Miami University of Ohio, and the University of Arkansas, along with select value-added assets.
Harrison Street Real Estate Capital, a real estate investment management firm, and its affiliates manage around $12.2 billion in property assets including student housing, senior housing, medical offices and self-storage facilities.
Singaporean Players Bet on College Housing
In addition to its US tie-up, GIC, which has over $100 billion in assets under management, partnered with Dubai-based Global Student Accommodation Group (GSA) in September 2016 to buy a British student housing portfolio from funds managed by Oaktree Capital Management, in a deal estimated to be worth £700 million ($900 million).
The sovereign fund manager is not the only state-backed Singaporean investor to sense an opportunity in student domiciles. Mapletree, a subsidiary of state investment fund Temasek Holdings, has purchased a total of $1.6 billion in college accommodation from Kayne Anderson Real Estate Advisors since November 2016, building a portfolio of 17 assets with 12,000 beds across 16 cities in the US.
Globally, the Singapore-listed real estate developer and investor holds a total of 43 assets with 18,024 beds in the US, Canada and the UK. That includes assets owned by the $1.3 billion Mapletree Global Student Accommodation Private Trust, a sponsored vehicle closed in March 2017. Mapletree raised $535 million for the five-year trust, which is said to be the first of its kind and is backed by investors including Great Eastern Life Assurance Company, DBS Bank and UBS AG.
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