Singapore-headquartered Keppel Corporation has expanded its specialist education real estate fund into Australia.
The Keppel Education Asset Fund (KEAF) has acquired two assets in Sydney for A$198m (€119m).
Australia is the second market outside Singapore for the fund, which has already invested in Japan.
KEAF, backed by institutional investors, including a large sovereign wealth fund, is exploring US$2bn in potential acquisitions of education assets, said Christina Tan, CEO of fund management and CIO of Keppel Corporation.
“The demand for quality schools and campuses in Asia-Pacific continues to be well supported by macro trends, including rapid urbanisation, an expanding middle class and rising affluence, as well as a continued focus on high-quality education.”
Tan said the education market was proving resilient, with education assets offering stable returns and inflation-adjusted rental growth.
“Riding on this trend, KEAF has invested in Singapore and Japan, and is now expanding into Australia,” she said.
Keppel’s education assets includes an existing purpose-built campus in Kensington, in Sydney’s eastern suburbs.
The property is currently fully leased to the University of New South Wales (UNSW) on a long-term basis.
It also bought a seven-storey commercial building in North Sydney under a forward-purchase agreement.
Under the agreement with the vendor, the building will be upgraded and converted to an independent school campus.
Tan said the Sydney acquisitions had long leases with established tenants and offered “attractive risk-adjusted returns and yield steady cashflows”.
Since its launch in 2020, the fund’s assets in Singapore and Japan had risen in value by more than 40%, Tan said.