The Canada Pension Plan Investment Board (CPPIB) and Singapore sovereign wealth fund GIC are jointly investing $1.4bn (€1.3bn) in a US student housing venture.

The two investors have joined sector specialist The Scion Group to invest in University House Communities (UHC) Group.

CPPIB and GIC are taking 47.5% interests in the venture, which is being sold by InvenTrust Properties. 

Scion will own the remaining 5%. 

The transaction is expected to close in mid-2016.

The joint venture will use the platform to buy high-quality student housing assets, primarily in top-tier US university markets.

Peter Ballon, managing director and head of real estate investments for the Americas at CPPIB, said: “The UHC portfolio represents a valuable opportunity to enter the US student housing sector with top-tier, well-located assets.

“This transaction enables us to gain immediate scale in the attractive US student housing market.”

Lee Kok Sun, regional head for the Americas at GIC Real Estate, added: “The portfolio is of high quality, and we expect it to generate steady cash flows moving forward.

“Our confidence in the US student housing sector continues, given its positive fundamentals and potential.”

UHC holds a portfolio of around 13,000 beds, which Scion will continue to manage and operate.