GIC and partners acquire US student housing portfolios for US$1.6b

A hostel for students in Baton Rogue, Lousiana, United States.
A hostel for students in Baton Rogue, Lousiana, United States.PHOTO: GIC

SINGAPORE - A joint venture entity formed by sovereign wealth fund GIC, the Canada Pension Plan Investment Board (CPPIB) and The Scion Group have acquired three United States student housing portfolios for approximately US$1.6 billion (S$2.24 billion).

These portfolios comprise:

- US$385 million acquisition of six properties located primarily in the southern US

- US$640 million acquisition of 11 properties in premier university markets across the US

- US$550 million in recapitalisations of 12 legacy Scion-owned and operated communities situated in campus markets across the US

CPPIB and GIC each own a 45 per cent interest in the three portfolios and Scion - a major owner/operator of student housing communities in the US - owns the remaining 10 per cent.

The joint venture - called Scion Student Communities - has completed US$2.9 billion of investments since its inception in January 2016, including a previously announced US$1.3 billion acquisition of University House Communities Group and its 19 properties last June.

Its portfolio now includes 48 student housing communities in 36 top-tier university markets, comprising 32,192 beds.

The average age of the properties is less than five years and over 75 per cent of the assets are located within one mile of their respective campuses.

"These high-quality, revenue-generating assets are good additions to our global student housing portfolio. We remain confident in this sector's long-term fundamentals and are pleased to continue our strong partnership with Scion and CPPIB," said Mr Adam Gallistel, the regional head of Americas at GIC Real Estate.

The joint venture will pursue additional opportunities to acquire high-quality student housing assets primarily in Tier 1 university markets in the US, a statement released on Thursday (Mar 16).