GIC invests in US multi-family properties through joint venture

The joint venture GIC has formed with two partners has already bought three "value-add, Class B garden-style communities" in major metropolitan areas in the US.
The joint venture GIC has formed with two partners has already bought three "value-add, Class B garden-style communities" in major metropolitan areas in the US.PHOTO: CORTLAND PARTNERS

Sovereign wealth fund GIC has formed a joint venture with two partners that will buy and renovate 8,000 to 10,000 residential units in the United States. They target to raise US$550 million (S$733 million) to fund the acquisitions.

GIC and the Canada Pension Plan Investment Board (CPPIB) will each own 45 per cent of the venture. Property investment firm Cortland Partners will own the other 10 per cent.

They are targeting what are known as Class B multi-family units, which are generally "well-maintained older assets", said GIC.

The joint venture has already bought three "value-add, Class B garden-style communities" in major US metropolitan areas, it added.

The rental complexes are Lakecrest at Gateway Park, a 440-unit estate in Denver, Colorado; Aurum Falls River, a 284-unit block in Raleigh, North Carolina; and the 308-unit Waterstone Apartments in Austin, Texas. The partners will also seek out acquisitions in major markets throughout the south and south-east of the US.

GIC Real Estate chief investment officer Lee Kok Sun said: "This venture will pursue a value-add strategy to capture the strong demand and resilient return profile of the US multi-family sector.

"We look forward to growing this venture with Cortland, an experienced multi-family firm with a sizeable presence in the Sun Belt target markets, and CPPIB, a partner who shares our long-term investment philosophy."

Ms Hilary Spann, managing director, head of Americas, of real estate investments at CPPIB, said that there are "compelling risk-adjusted returns" from investments in the US multi-family real estate sector.

She noted that prospects are being driven by favourable population growth and employment trends.

Earlier this month, GIC said a separate joint venture with CPPIB and The Scion Group had snapped up a student housing portfolio in the US for about US$1.1 billion. The portfolio consists of 24 assets in 20 university campus markets across the country, comprising 13,666 beds.

A version of this article appeared in the print edition of The Straits Times on January 10, 2018, with the headline 'GIC invests in US multi-family properties through joint venture'. Print Edition | Subscribe