Canada Pension Plan Investment Board (CPPIB), Singapore’s sovereign wealth fund GIC and the largest private student housing operator in the US, Scion Group, announced that their student housing joint venture has bought three new US portfolios worth €1.5 billion in total.
The portfolios comprises: a $385 million acquisition of six class-A properties located primarily in the southern US; a $640 million acquisition of 11 class-A properties in premier university markets across the US; and a $550 million in recapitalisations of 12 legacy Scion-owned and operated communities situated in leading campus markets across the country.
CPPIB and GIC each own a 45% interest in the three portfolios and Scion owns the remaining 10%.
Commenting on the acquisition, head of US real estate at CPPIB, Hilary Spann, said: ‘The US student housing sector is an attractive investment opportunity, driven by secular strength in enrolment growth and favourable supply dynamics. Achieving scale in this sector is an important global investment objective for Cppib.’
Adam Gallistel, regional head of Americas at GIC Real Estate, added that these high-quality, revenue-generating assets were good additions to the SWF’s global student housing portfolio. ‘We remain confident in this sector’s long-term fundamentals,’ he said.
Since its inception in January 2016, the joint venture, called Scion Student Communities, has completed €2.7 billion of investments, including the previously announced €1.2 billion acquisition of University House Communities Group and its 19 properties in June 2016. The joint venture has also deployed around €1 billion in equity capital.
The portfolio now includes 48 student housing communities in 36 university markets, comprising 32,192 beds. The average age of the properties is less than five years and over 75% of the assets are located within one mile of their respective campuses.