Singapore’s sovereign wealth fund GIC and Dutch pension fund manager APG are taking a majority stake in The Student Hotel (TSH), in a deal valuing the European student housing, co-working and hotel group at €2.1bn.
APG, an investor in TSH since 2015, will increase its holding alongside founder Charlie MacGregor, while GIC joins as a new investor. Aermont Capital, the European asset manager that has part-owned the business since 2014, will sell its share as part of the deal.
MacGregor opened the first Student Hotel in 2012 and now operates across 15 sites in Europe with a further 10 in the development pipeline. With the help of the new investment, he plans to double the portfolio to 50 hotels including one in North London and another in Glasgow, Scotland. Three new hotels are set to open in 2022, in Madrid, Barcelona and Toulouse.
TSH’s hybrid hospitality model, combining student accommodation, hotel rooms, co-working and meeting spaces, bars and restaurants, has proven highly resilient during the pandemic.
MacGregor said: “We lost all of our hospitality during covid, but our hybrid model meant we were able to fill hotel rooms with students and remain cash-positive. Mixed-use of the buildings is at the core of our business, so that we have a diversified income stream rather than rely on one, which is pretty risky.
“Now the hospitality market is coming back strongly we can allocate rooms for guests again. We have bold plans, and the additional committed capital will allow us to be even more ambitious.”
Lee Kok Sun, chief investment officer of real estate, GIC, said its rationale for investing in TSH was based on confidence that “this investment will generate resilient long-term returns”.
GIC’s head of European real estate Tracy Stroh added: “The Student Hotel’s hybrid hospitality model is unique. Anchored by purpose-built student accommodation that appeals to the student demographic, yet still catering to both business and leisure uses, this flexibility enables TSH to capture opportunities as demand patterns fluctuate throughout the year.”
Robert-Jan Foortse, head of European property investments at APG, said: “We are convinced that TSH will provide an attractive long term, stable investment return for our pension fund client ABP and its participants.”
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