GIC, the Singaporean sovereign wealth fund, has teamed up with veteran student housing specialist GSA, to acquire a 7,150-bed UK student accommodation portfolio in the largest transaction in the sector this year.
The portfolio consists of both standing assets and developments. When the developments are completed the portfolio will have an estimated value of £700 mln (€811 mln),
The vendor was funds managed by Oaktree Capital Management.
The portfolio has been built within the last three years and includes 3,634 operational beds across nine purpose-built student accommodation properties located in six top university cities: Liverpool, Bristol, London, Edinburgh, Cardiff and Southampton. The deal also includes a pipeline of 3,516 beds in five cities: Plymouth, Portsmouth, Birmingham, Bournemouth and Cambridge. GSA said it will bring the pipeline on stream over the next 30 months.
Madeleine Cosgrave, regional head for Europe at GIC Real Estate, said: 'The high-quality assets are located close to university campuses and city centres. As a long-term value investor, we believe student accommodation will be a sector that continues to deliver steady rental growth and resilient income returns amidst a challenging, low-yield environment.'
GIC, which manages over $100 bn (€89 bn) across various asset classes, is one of the several large institutional investors making a big push into student housing. Last January, GIC joined with Canadian pension giant CPPIB to acquire 18 assets and four developments in the US for €1.4 bn.
GSA says of itself that it 'created the student accommodation sector'. The GSA management team, led by its founder Nicholas Porter, has created $7.5 bn worth of student accommodation assets over the last 25 years.
Porter previously founded London and Australia's Urbanest student accommodation brand and also the Unite Group, which he grew to become a FTSE 250 company. The UK asset class attracts global investment and is now estimated to be worth over $30 bn.
Porter, founder and chairman of GSA, said: 'I am very pleased to renew a longstanding relationship with GIC and announce our partnership. This top quality portfolio will give GSA a stronger foothold in the UK market, where the high demand for university places continues to drive the need for well-managed, purpose built accommodation. The Student Housing Company brand will come into the GSA family, alongside our Asian and European student brand Uninest, allowing us to pioneer the management of multiple brands under one umbrella.'
GSA is present in Australia, China, Dubai, Germany, Ireland, Japan, and the UK. Following this transaction, GSA has a complete, in development and pipeline portfolio of student accommodation assets approaching 20,000 beds. GSA operates two student brands. Uninest and The Student Housing Company.
GSA's advisers on the transaction were Nabarro and PWC.
