AXA Investment Managers - Real Assets (AXA IM - Real Assets) has entered the student housing sector with the acquisition of all 37 Spanish student accommodation facilities owned by Spain’s student accommodation provider Resa.

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AXA IM - Real Assets JV buys Spain’s largest student digs portfolio

Financial details were not disclosed. However, the portfolio is believed to have a value of between €400 and €500 mln.

The acquisition was made by AXA IM - Real Assets on behalf of its clients and in a JV with two new partners, an unnamed Dutch institutional investor and US property investor Greystar.

AXA IM - Real Assets, on behalf of its clients, and the Dutch institutional investor have acquired equal sized shares representing the substantial majority holding in the portfolio, while Greystar, which has also purchased the Resa operating business and will act as property, development and asset manager for the portfolio, has bought the remaining balance.

The Resa portfolio comprises 9,309 student beds across 33 currently operational assets and four development projects located over 19 Spanish cities, making this the largest ever student housing acquisition on the Iberian Peninsula. CBRE acted as financial advisor to the vendor.

The Resa portfolio currently represents 10% of Spain’s total purpose built student housing provision. AXA IM - Real Assets and its partners said they intend to grow the Spanish student accommodation portfolio by investing in further facilities and developments.

This transaction comes shortly after the acquisition by AXA IM - Real Assets, on behalf of one of its clients, of a majority stake in University Center Chicago, a 1,732-bed student housing property located in downtown Chicago, Illinois in July 2017.

Commenting on the acquisition, Laurent Lavergne, head of Separate Accounts at AXA IM - Real Assets said: 'This transaction provides us with a rare opportunity to acquire, on behalf of our clients, a large scale and extremely high quality portfolio of student accommodation, which is also managed by Spain’s leading halls of residence operator - Resa. It also marks a number of significant firsts for us, being our first investment into this asset class in Europe and our first joint venture with our two JV partners.'

He added: 'Student accommodation is an asset class of real interest to us, offering extremely visible income streams that are backed by operational businesses and dislocated from real estate market cycles. The Spanish student accommodation market is also both highly fragmented and undersupplied and therefore presents us with an opportunity to grow our portfolio by investing further in our Resa joint venture.'

US Greystar has already been active in Europe mainly with investments in the UK and the Netherlands. In 2016 the group merged its student home business owned jointly with US investment bank Goldman Sachs with the British charitable foundation Wellcome Trust in a £2 bn (€2.6 bn) student accommodation joint venture.

Steven Zeeman, managing director of Investment Management – Netherlands, at Greystar said: 'We’ve identified Spain as a territory with significant potential – the country is presently one of Europe’s fastest growing economies and there is now a serious shortage of purpose-built rental accommodation suitable for students and young professionals in the larger cities.'