Joint ventures between global players are common and allow investors to achieve scale
From Singapore’s sovereign wealth fund (GIC), to Canada’s largest pension fund (CPPIB), to the world’s largest insurer (Allianz), a range of global players are active in the buying and selling of student accommodation. Joint ventures in the sector are common, especially for the larger entity-level and portfolio deals, allowing investors to achieve scale and share risk.
Top investors in student accommodation since 2016
Source: Savills Research using RCA | The total investment figure for joint ventures is applied to the individual parties where split is not known | *Includes iQ Student Accommodation purchase of the Pure Student Living portfolio
Greystar has been the single most active player globally since 2016, and currently owns over 50,000 units across the US and four European countries. Over the past three years, it has invested $6.6bn in student accommodation, according to RCA. A significant share of this ($4.6bn) can be attributed to its 2018 purchase of EdR, which is a student REIT and one of the largest developers and owners student housing in the US.
In conjunction with this acquisition, Blackstone Real Estate Income Trust (BREIT) formed a 95%/5% joint venture with Greystar to acquire a portfolio of 20 former EdR properties, with Greystar/ EdR continuing to manage the properties.
GIC, a Singaporean sovereign wealth fund, has invested $4.5bn in student accommodation since 2016, making it the second biggest investor over the period. GIC formed a joint venture with the Canada Pension Plan Investment Board (CPPIB) and The Scion Group (a US based student housing operator), named Scion Student Communities. Much of GIC’s activity has since been via this joint venture, with notable deals including a $1.1bn purchase of a US portfolio from Harrison Street Real Estate Capital early in December 2017, consisting of 24 assets.
Separately, GIC was the one of the first major institutional investors to enter the Australian market, when it bought a majority stake in Iglu in 2014. It purchased two additional student blocks in Sydney for over $300m in 2017. GIC currently owns student assets in the UK, US, Germany, and Australia.
Student housing yields
Source: Savills Research | Bond yields as of 4th of April 2019
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