Private equity real estate firm BLG Capital has sold a stake in a company owning two student accommodation blocks to The Abraaj Group for an undisclosed sum in a partial exit for the Istanbul-based firm. Abraaj, which considers itself a ‘leading investor in growth markets’ and acts for 300 investors, struck the deal on behalf of an income-generating real estate fund that targets the Middle East, North Africa and Turkey.
The company at the center of the transaction, Republika Academic Apartments, owns 1,274 beds split across two properties at Ortakoy and Buyucekmece in Istanbul. Abraaj, which typically invests $10 million to $100 million in private equity investments as well as in real estate, said it would invest alongside BLG from now on to take advantage of the under supply of institutional-quality student accommodation and strong demand for higher education due to Turkey’s young and growing population and increasing household income.
The deal comes with the approach of the one-year anniversary of BLG closing its Turkish real estate fund on €142 million of capital commitments from an array of international investors. Announcing the final close of BLG Turkish Real Estate, the Istanbul-based firm said at the time that it thought the vehicle to be the largest real estate fund focused on the Turkish market since 2007.
Of the deal with Abraaj, Serdar Bilgili, chairman and chief executive officer of BLG, said: “We are very excited about our partnership with one of the most reputable global investors in the private equity business and look forward to developing our portfolio further via additional investments in the student accommodation sector.”
Bilgili added: “The transaction marks an important strategic partnership to further grow the vibrant Republika brand in the rapidly growing student accommodation market of Turkey.”
Selcuk Yorgancioglu, partner and regional head of central Asia and Turkey at Abraaj, said: “I am delighted that Abraaj’s on-the-ground presence and strong local connections in Turkey have enabled us to identify and acquire a substantial stake in Republika.”