Greystar Real Estate Partners is among several global investors looking at Australia’s Campus Living Villages (CLV), said to be worth AUD2bn (€1.35bn).
CLV, Australia’s largest student accommodation provider, manages 45,000 beds in Australia, New Zealand, the UK and the US.
Industry sources told IPE Real Estate Greystar executives visited Sydney for preliminary discussions with UBS, which has been appointed to explore options for the future of CLV, including an outright or partial sale of its assets.
The formal process is expected to begin next month.
Sources said UBS started preliminary market soundings with potential buyers, including Blackstone and a number of parties from Asia.
“Greystar is testing the market,” an industry source told IPE Real Estate.
When IPE Real Estate spoke with Wes Fuller, Greystar’s executive managing director, in March this year, he said Australia was one country on its radar for expansion.
Fuller runs Greystar’s investment management and European businesses from London.
Greystar has a $350m (€312m) partnership with Australia’s REST Industry Super – the single largest investor in CLV – in a venture that builds multi-family projects in the US.
REST Industry Super’s stake in CLV is between 40% and 45%.
The balance is held by other Australian super funds, including Hostplus (with around 20%), NGS Super, Equipsuper and Catholic Super Victoria.
A CLV investor told IPE Real Estate: “There has been acknowledgement that we have been struggling with the management structure for a little period, and we are trying to bed that in now.
“This is why we are looking at what our alternatives might be.”
The source said: “All options are on the table at the moment. One option is divestment. We can sell the portfolio in entirety, but that is not to say that part of the strategy might be to retain some assets.
“Another option is to establish a new structure to hold the assets and to increase the capital allocation to that structure once we get the manager in place.”
Another CLV investor agreed there may not be a portfolio sale, saying: “What we need is the right manager, someone who can come in and manage our properties.”
If Greystar decides to proceed with a formal bid, it will be likely to speak to existing CLV investors, including REST Industry Super.
Paul Howard, general manager of investments at REST Industry Super, said: “We are well aware [Greystar] is interested in CLV, as are many other investors and managers.”
Industry sources said Greystar could consolidate its operations in the UK and Europe with those in Australia to form a global platform.
Today, Greystar manages 410,000 student beds globally, mainly for institutional investors, making it one of the largest players in this space in the world.
If Greystar proceeds with its acquisition, CLV will present a proven, established platform for the group.
One industry source, however, said a sticking point may be CLV’s substantial portfolio of some 20,000 beds in the US, where the market is slowing down.
That is one reason why Greystar expanded into the UK and Europe in search of future growth.
The source said that, if the slowing US market were an issue, it could be resolved by breaking up the portfolio.
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