GIC in joint venture to buy US student housing firm for $2b

Singapore investment firm GIC has joined hands with two other investors to form a joint venture to acquire a portfolio of student housing units in the United States for US$1.4 billion (S$2 billion).

GIC, Canada Pension Plan Investment Board (CPPIB) and the Scion Group signed an agreement to buy the University House Communities Group (UHC), which owns the properties, from InvenTrust Properties.

Through the joint venture, GIC and CPPIB will each own a 47.5 per cent interest in UHC. Scion, which will manage and operate the portfolio, will own the remaining 5 per cent. UHC has properties near top-ranked US university campuses, which comprise nearly 13,000 beds.

The joint venture will also pursue other opportunities to acquire student housing at the top end of university markets in the US, the statement by the three investors said.

Mr Lee Kok Sun, regional head for Americas at GIC Real Estate, said the portfolio is expected to generate steady cash flows for the company.

"Our confidence in the US student housing sector continues, given its positive fundamentals and potential. We are pleased to establish a partnership with Scion, one of the most active private operators and owners in the US student housing sector, and CPPIB, a long-term investor aligned with our values," he said.

Mr Peter Ballon, managing director, head of real estate investments Americas at CPPIB said: "The UHC portfolio represents a valuable opportunity to enter the US student housing sector with top-tier, well-located assets.

"This transaction enables us to gain immediate scale in the attractive US student housing market."

GIC manages "well over US$100 billion" of Singapore's reserves.

This article was first published on Jan 5, 2016.
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