GIC venture buys UK student housing portfolio worth $1.2b

Singapore sovereign wealth fund GIC and student accommodation developer GSA have acquired a portfolio of student accommodation assets in Britain from funds managed by Oaktree Capital Management.

The transaction is the largest student accommodation deal struck in Britain this year, GIC said yesterday, although it declined to disclose the purchase price.

Separately, The Telegraph reported that when completed, the total portfolio comprising 7,150 beds will be worth around £700 million (S$1.2 billion).

The portfolio was built over the last three years and includes 3,634 operational beds across nine student accommodation properties in six top university cities - Liverpool, Bristol, London, Edinburgh, Cardiff and Southampton.

The deal also includes a pipeline of 3,516 beds in Cambridge, Plymouth, Portsmouth, Birmingham and Bournemouth that GSA will bring on-stream over the next 30 months.

GIC has significantly increased its exposure to alternative asset classes such as real estate and private equity in the past decade.

It had 7 per cent of its assets parked in real estate as at March 31.

Ms Madeleine Cosgrave, regional head of Europe for GIC Real Estate, said: "GIC is pleased to partner GSA, which is among the leading developers and operators of student housing globally. The high-quality assets are located close to university campuses and city centres.

"As a long-term value investor, we believe student accommodation will be a sector that continues to deliver steady rental growth and resilient income returns amid a challenging, low-yield environment."

GSA chairman Nicholas Porter said: "I am very pleased to renew a longstanding relationship with GIC and announce our partnership.

"This top-quality portfolio will give GSA a stronger foothold in the UK market, where the high demand for university places continues to drive the need for well-managed, purpose-built accommodation."

The acquisition makes GSA one of the most significant student accommodation operators in Europe and the only operator with assets in nine countries globally.

This article was first published on September 30, 2016.
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