Dutch pension giant PGGM's recent acquisition of a majority stake in a student beds provider illustrates how institutional investors are willing to take large bets on niche real estate sectors to access stable income streams.
Dutch pension giant PGGM's recent acquisition of a majority stake in a student beds provider illustrates how institutional investors are willing to take large bets on niche real estate sectors to access stable income streams.
The transaction was the largest single real estate-related transaction recorded by PropertyEU Research from 1 July to mid-September.
PGGM, which has EUR 125 bn of pension assets under management, acquired a 60% stake in University Partnerships Programme, the second largest provider of on-campus student accommodation in the UK in mid-September.
The stake was sold by Barclays Infrastructure Funds Management (BIFM) to PGGM Infrastructure Fund 2010. Although the price was not disclosed the investment been estimated to be in the region of EUR 1 bn.
Officially an 'infrastructure' play the deal is all about securing long-term rental income, Henk Huizing, head of infrastructure at PGGM said: 'The deal is a good example of our efforts to increase direct investments in stable social infrastructure, focused on the long term. And, of course, it is crucial that the inflation-linked, stable cash flows perfectly match the requirements of our clients.'
Coinciding with the PGGM-UPP transaction, Unite, the largest student accommodation specialist in the UK, announced it was extending its existing partnership, Unite Capital Cities, with GIC Real Estate, the real estate arm of the Government of Singapore Investment Corporation. Unite and GIC said they were also creating a new 50:50 joint venture, the London Student Accommodation Joint Venture, to invest £330 mln in development activity in London over the coming years.
The preliminary analysis of the third quarter transactions appears in the October edition of PropertyEU Magazine.
