GIC JV ACQUIRES TWO LONDON STUDENT HOUSING PROJECTS FOR $472M
2021-06-25
Singapore’s GIC has made its third major real estate investment this
month, as the sovereign wealth fund doubles down on a four-year-old bet on
student housing in the UK.
Unite Students, Britain’s largest provider of purpose-built student
accommodation, said Friday that it had sold two student housing properties in
London to its 50:50 joint venture with the $360 billion Singaporean fund for
£342 million ($472 million).
The deal supersizes the partners’ LSAV vehicle, which was first formed in early 2017 with a $283 million joint
venture. The fresh backing from GIC adds to a long string of investments by
Singaporean government-linked entities with the London-listed student housing
provider.
“I am delighted to announce further growth of our LSAV joint venture
with GIC,” said Unite chief executive Richard Smith. “This follows our
announcement of LSAV’s 10-year extension in May and reflects a strong
endorsement of both our sector-leading operating platform and the purpose-built
student accommodation sector from GIC.”
Capital Reinvestment
Unite told the
London Stock Exchange that the disposal of the properties — one
near northwest London’s Wembley Stadium and a second in the East End’s Whitechapel
district — is in line with book values and reflects an average net initial
yield of 4 percent.
The two properties have 1,358 beds between them, and the joint venture
will fund the acquisition through £208 million in equity from Unite and GIC and
a £140 million eight-year loan facility provided by Barings.
School Ties
Unite and GIC formed LSAV in 2017 and announced their first investment
in February of that year with the £227 million
acquisition of a five-building, 3,067-bed student housing
complex at Aston University in Birmingham. At the time, the complex was the
only accommodation offered to the school’s 11,000 students and was fully
occupied.
That linkage with GIC established a precedent soon followed by two
more investment groups controlled by Singapore government entities, with the UK
firm having now inked more than $1.1 billion in student housing transactions
with investors from the city-state.
In September 2018, Singapore Press Holdings said it would buy a portfolio of
14 student accommodation properties across six UK towns and
cities for S$321 million (then $233 million) from Unite Integrated Solutions, a
subsidiary of the developer.
The government-backed newspaper publisher announced last month that it
would spin off its media
business into a non-profit entity as it concentrates on
property investment.
In October 2019, Mapletree Investments, a wholly-owned subsidiary of
state holding firm Temasek, acquired a pair of
student housing assets with a total of 1,127 beds in Coventry
from Unite for £96 million.
Investing $4B Per Month
In addition to its partnership with Unite, GIC in 2016 had partnered
with Dubai-based Global Student Accommodation Group to buy a portfolio of
UK student housing projects from funds managed by Oaktree
Capital Management. No sales figures were disclosed, but the assets were
expected to be worth £700 million when completed.
- *E-mail:
- *Cel:
- *Password: