GIC Invests in $283M UK Student Housing JV

Singapore’s GIC has acquired its third European student housing project in five months as the sovereign wealth fund announced on Friday that it has agreed to invest in a £227 million ($283.5 million) joint deal for a complex at Aston University in Birmingham, England.

The 50-50 joint purchase of Aston Student Village is the first deal for a newly-established joint venture between GIC and Bristol-based Unite Students, the UK’s largest provider of purpose-built student accommodation. The transaction follows a pair of student accommodation investments by the Singaporean fund with Dubai-based Global Student Accommodation Group in late 2016.

GIC, which has been in the news lately for the proposed sale of GLP’s fleet of sheds, has been acquiring a growing portfolio of beds, as the fund now has substantial student housing holdings in the US and Australia, in addition to Europe. GIC is the single largest shareholder in GLP, which is currently negotiating the potential sale of the company to unspecified buyers.

Buying the Only Place to Sleep at a Birmingham University

In Birmingham, GIC and its new UK partner have purchased a total of 3,067 beds across five detached buildings on Aston University’s campus in central Birmingham. According to a statement by GIC, the complex is currently the only accommodation offered to Aston University’s 11,000 students and is fully occupied.

“ASV is a high-quality asset uniquely located both on-campus and in the city centre. We are confident in the long-term growth potential of this asset and the student housing sector which we find attractive for its resilient income streams,” said Madeleine Cosgrave, Regional Head for Europe at GIC Real Estate. She added that, “GIC is pleased to strengthen our partnership with Unite, a leading manager and developer of student accommodation in the UK, through this acquisition.”

The joint venture, London Student Accommodation Vehicle, is funding the deal with 40 percent equity and 60 percent debt, according to a statement by Unite Students. The acquisition will expand the UK firm’s holdings in Birmingham to 5,000 beds, and the facility is scheduled to generate gross annual income of approximately 17 million pounds for the 2017/18 academic year the company said.

More Beds for Singapore’s SWF

The Birmingham deal for GIC follows soon after the fund partnered in late September 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 ($900 million) when completed.

Less than a week later, GIC again hooked up with the Dubai-based company for a 1,000 bed student accommodation joint venture in Germany.

In January 2016 the Singaporean fund teamed with Canada Pension Plan Investment Board (CPPIB) and the Scion Group to acquire a $1.4 billion portfolio of US student housing from InvenTrust Properties. That deal gives GIC an interest in where 13,000 US students sleep each night.

Down under, GIC formed a joint venture with Macquarie Capital in 2014 to acquire a majority interest in student accommodation group Iglu, which at the time held a portfolio of 900 beds across three properties in Sydney and Brisbane.