German pension funds have pulled off the second major real estate transaction in the Irish market this week by backing Hines' expansion of its student housing platform from the UK to Dublin.
Hines, an international investment firm headquartered in the US, has acquired four prime assets in the centre of Dublin on behalf of a group of German pension funds. The deal comes days after German pension giant BVK, acting through Universal Investments, acquired the Liffey Valley shopping centre in west Dublin from a consortium comprising HSBC Alternative Investments Limited (HAIL), Grosvenor Britain & Ireland and Hines, for €630 mln.
The investment volume for the student housing deal was not disclosed, but John Moran, CEO of JLL Ireland, the selling agents, said: 'This is the largest-ever student housing transaction in the history of Ireland. When completed, this prime purpose-built portfolio will total 1,500 rooms, providing a vital supply of student beds in what is a chronically under-supplied sector. Given the international nature of the transaction it is a further vote of confidence in the Irish economy and real estate.'
The portfolio, which includes one operational asset and three schemes in various stages of development, has been acquired from ThreeSixty Developments, a student housing developer and portfolio company of funds managed by Oaktree Capital Management. The transaction follows the successful sale of their operating platform, The Student Housing Company, and 7,100-bed UK portfolio in September.
The combined four assets will deliver around 1,500 new beds for Dublin's growing student population. The Binary Hub, located in the heart of the city, was completed in July 2016 and provides 470 beds. Developments in Dorset Street and Summerhill are due to complete in 2017 and 2018, providing 450 and 400 beds respectively. The fourth scheme in the portfolio, a development site on Cork Street, is subject to planning approval and could be delivered by 2019. The projects are intended to be held on a long-term basis once complete.
The transaction represents the second major student housing deal Hines has executed this year, following the acquisition of six prime development sites across the UK from McLaren Property.
The expansion into student housing forms a key part of Hines' current strategy of diversifying into new asset classes to build on its existing, established portfolio of office, retail, industrial and residential investments.
Alex Knapp, Hines managing director responsible for student accommodation said: 'Ireland is an exciting growth market and we are pleased to have expanded our platform through this acquisition. We are already looking at further opportunities to grow our portfolio both in Ireland, the UK and elsewhere in Europe during 2017.'
Savills acted for Hines and JLL’s corporate finance and alternatives teams represented ThreeSixty/Oaktree on this transaction.
