Goldman Sachs joins Australasian student-housing partnership

Goldman Sachs is partnering with Blue Sky Private Real Estate in an Australasian student housing joint venture.

The US investment bank will invest around AUD1bn (€674m) in the partnership, which will target Australia and New Zealand.

Goldman Sachs entities and Blue Sky-managed funds will each own 50% of future projects.

Blue Sky – a subsidiary of Brisbane-based, ASX-listed Blue Sky Alternative Investments – said the partnership would seek to build a portfolio of 5,000-10,000 units, valued at up to AUD1bn.

Adam Vaggelas, head of Blue Sky Private Real Estate, said the Goldman Sachs partnership was a key milestone in the company’s strategy to build out a platform of quality, well located and affordable student-accommodation assets in a heavily under-supplied market.

“Education is Australia’s largest non-resource export industry, worth in excess of $18bn per year and growing,” he said. 

“The ability to scale further into this domestic thematic, in part due to the region’s proximity to a rapidly expanding Asian middle class, is a key focus for the partnership.”

Blue Sky said the sector has been heavily under-supplied compared with other global student markets including the US and the UK.

The deal follows the finalisation of a £2bn UK student-housing joint venture in January with the Wellcome Trust and US rental residential housing manager Greystar.

Senior real estate executives Vaggelas and Nick Singleton formulated Blue Sky’s investment strategy in 2014.

The fund managers and their team have grown the company’s student accommodation development pipeline to more than 3,000 beds across Australia.

The sector is, Vaggelas added, seen as a highly resilient, asset-backed investment, with strong investor appetite over the past few years in more mature global markets.

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