GIC and Macquarie Capital buy majority stake in Australia's Iglu

Singapore sovereign wealth fund GIC has formed a joint venture with Macquarie Capital to acquire a majority stake in Australian student accommodation company Iglu.

GIC did not reveal how much the joint venture had invested in Iglu or how big a stake it bought, but said in a statement yesterday that the transaction is the largest of its kind in the Australian student accommodation sector.

Investments in Australasia make up 3 per cent of GIC's portfolio, the fund said in its annual report for the year ended March 2013, while real estate makes up 10 per cent.

Global head of Macquarie Capital Real Estate, Mr Chris Green said in the same statement: "The student accommodation sector has excellent investment fundamentals with a well documented supply shortage.

"We believe Iglu is an outstanding developer and operator of off-campus student accommodation in Australia, and as such is the ideal business to work with us to build a portfolio of premium assets in the best locations across the country."

Iglu, a specialist developer, operator and owner of purpose-built off-campus student accommodation, has a property portfolio of about A$150 million (S$168.5 million), comprising over 900 beds across three properties in Sydney and Brisbane.

Iglu Central, located near Sydney's Central Station, has been fully occupied since completion. Iglu Chatswood, which has opened in time for the 2014 academic year, is the only off-campus purpose built student accommodation asset on Sydney's north shore.

The third property, Iglu Brisbane, is a new development in the heart of the Brisbane central business district, which is due to open for the 2016 academic year.

GIC and Macquarie Capital said they expect to inject more funds into Iglu to help it build more properties close to educational institutions and public transport, in cities where there is a shortage of suitable student accommodation.