The Netherlands’ largest pension fund asset manager is to invest in Australian student housing with the help of a UK-based developer.
APG has entered into a joint venture with Scape Student Living to develop, own and manage direct-let student accommodation in Australia. It has provided an initial equity commitment of AUD220m (€155m).
The joint venture is looking to replicate the luxury student accommodation model that Scape has been pursuing in the UK, mainly in London. According to APG and Scape, Australia does not yet have such a high-end offering.
Scape also manages the GCP Student Living, the UK’s first real estate investment trust (REIT) focused exclusively on student housing.
Nigel Taee, co-founder and executive chairman of Scape, said: “We strongly believe that our design and service philosophy will energise a neglected market and give students a real choice for the first time.”
The joint venture has already acquired two development sites in Melbourne, close to RMIT University, with a view to delivering more than 1500 beds by 2018.
The intention is to eventually own 5000 beds across Sydney, Melbourne, Brisbane, Canberra and Adelaide.
Sachin Doshi, head of private real estate investments, Asia Pacific at APG, said: “This investment is consistent with our strategy to selectively target sectors that are in early stages of becoming institutional in Asia Pacific, but provide compelling long term underlying fundamentals.
“With tertiary education being a key anchor of Australia’s economy, continued growth of international students from Asia and chronic shortage of purpose built student accommodation, we strongly believe that the sector provides superior risk-adjusted returns potential and is poised to become a mainstream asset class in the coming years.
“In Scape, we have a formidable new entrant into the nascent Australian student accommodation landscape.”