GIC, CPPIBB Joint Venture Snatches Up Another $1.6 Bil in US Student Housing

Brush off your futon and grab your hacky sack because a joint venture involving Singapore’s GIC and Canada’s CPPIB has agreed to invest another $1.6 billion into student housing in the US.

The Singaporean sovereign wealth fund and Canada’s largest pension fund manager are expanding on the Scion Student Communities joint venture set up just over a year ago with Chicago-based student housing specialist The Scion Group to acquire three student housing portfolios composed of 29 assets.

Scion Group Sells More Assets

The joint venture’s new round of investments include spending $550 million to recapitalise 12 legacy Scion Group-owned and operated communities. The other two investments include $385 million for a portfolio of six student properties in the southern US and $550 million for a third portfolio. The three parties did not release details concerning the sellers of the non-Scion Group-owned portfolios.

“These high-quality, revenue-generating assets are good additions to our global student housing portfolio. We remain confident in this sector’s long-term fundamentals and are pleased to continue our strong partnership with Scion and CPPIB,” said Adam Gallistel, regional head of Americas, GIC Real Estate.

With these new additions, the Scion Student Communities joint venture now owns 48 student housing communities in 36 university markets, comprising 32,192 beds. The average age of the properties is less than five years and over 75 percent of the assets are located within one mile of their respective campuses, according to a statement from the joint venture parties. The three parties have inked $2.9 billion in investments in just over a year.

“We are thrilled to be partnering with two of the world’s premier real estate investors in the ongoing consolidation of the student housing sector,” Robert Bronstein, Scion’s President, said in the joint statement.

GIC and CPPIB each have a 45 percent interest in the student housing vehicle, with Scion Group maintaining a 10 percent stake.

The joint venture’s first foray came in the form of a $1.4 billion acquisition of the University House Communities Group from InvenTrust last year, securing for the joint venture a 13,000 bed foothold made up of 18 stabilized communities and with four under development.

GIC Can’t Get Enough Student Housing

Outside of their workings with Scion and CPPIB, GIC has invested in three other portfolios of student housing in the past year.

During February the sovereign wealth fund invested in the UK market, investing $283.5 million in a joint deal with Unite Students for a complex at Aston University in Birmingham, England.

The joint venture with Unite Students came just a few months after GIC struck a pair of European student housing deals with Dubai-based Global Student Accommodation Group.

In September, the fund teamed up with GSA Group with Global Student Accommodation Group to buy a portfolio of UK student housing projects from funds managed by Oaktree Capital Management which are expected to be worth £700 million (then $900 million) when completed. Then, less than a week later, the two companies agreed to invest together again, for a 1,000 bed student accommodation joint venture in Germany.