A new Australian student accommodation partnership made up of AXA IM - Real Assets, Allianz Real Estate, Dutch pensions group APG and Scape Australia has acquired Urbanest’s A$2bn (€1.2bn) student housing portfolio.

In May, IPE Real Assets reported that Washington State Investment Board had put Australian student accommodation business Urbanest up for sale and appointed consultants Savills to manage the sale.

Announcing the deal, AXA IM - Real Assets said the Australian Student Accommodation Program Joint Venture (ASAP JV) has agreed to buy Urbanest, the owner of Australia’s largest purpose-built student accommodation (PBSA) portfolio for an undisclosed sum.

The Urbanest portfolio comprises 6,805 beds across 14 operational assets located in four major Australian cities and will now be operated by Scape.

AXA IM - Real Assets said the ASAP JV’s portfolio of student housing assets in Australia will now total 10,315 beds.

Kumar Kalyanakumar, head of Australia at AXA IM - Real Assets, said the Urbanest portfolio represents a rare and high-quality opportunity to grow our recently established joint venture, through investing in the supply-constrained and high demand Australian PBSA market.

“The sector has favourable demand drivers and growing institutional appeal, assets are tightly held and the barriers to entry are relatively high, particularly in Sydney, which makes this opportunity even more appealing.

“The acquisition provides the joint venture with immediate scale as the owner of the largest and most dominant PSBA portfolio in Australia which will benefit from both near and longer-term operational expenditure synergies.”

Philippe de Martel, head of equity mandates at AXA IM - Real Assets, said: “We have a high conviction for alternative real estate classes given their expected superior risk-adjusted returns potential, ability to generate counter-cyclical income streams and the underlying fundamental growth drivers that support them.

“This acquisition again demonstrates our ability to deliver on our global expansion strategy and firmly establishes AXA IM - Real Assets as a major presence in the Australian real estate market, one of the top six pensions markets globally and one of the core real estate markets in Asia.”

The ASAP JV was formed in September, with AXA IM - Real Assets, alongside Allianz and Scape, with APG entering more recently.

At the time, IPE Real Assets reported that the joint venture was considering buying Urbanest’s portfolio which was valued “north of A$2bn”.

The venture is expected to raise A$1.5bn in equity and build up a portfolio worth A$4bn.