GIC JV buys UK student housing portfolio for £430m

In the UK’s largest student housing deal of the year, LA-based Oaktree Capital Management sold a 7,150-bed portfolio located in six cities.

Singapore’s sovereign wealth fund, GIC, is continuing its bet on student housing with the purchase of a 7,150-bed portfolio from alternative investment firm Oaktree Capital Management, according to a Thursday statement.

GIC teamed up with Dubai-based student housing developer GSA to purchase nine properties in six cities for about £430 million ($559 million, €497 million), according to local media. Terms of the deal were not disclosed, and a spokesman for Los Angeles-based Oaktree declined to comment on the transaction.

The portfolio includes 3,634 existing beds and a pipeline of 3,516 beds that GSA will complete over the next 30 months, according to Thursday’s statement. The existing properties are located in Liverpool, Bristol, London, Edinburgh, Cardiff and Southampton; the upcoming developments are in Plymouth, Portsmouth, Birmingham, Bournemouth and Cambridge.

The deal is the UK’s biggest student housing transaction this year, according to real estate data provider Real Capital Analytics.

“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 amidst a challenging, low-yield environment,” Madeleine Cosgrave, GIC’s Europe head, said in the statement.

GIC completed another student housing transaction in January when it partnered with the Canada Pension Plan Investment Board (CPPIB) to purchase a US student housing portfolio for $1.4 billion. The institutional investors formed a joint venture with Chicago-based student housing owner The Scion Group to buy the portfolio from InvenTrust Properties, an Oak Brook, Illinois, real estate investment trust, and make future investments.

The first purchase through the joint venture was University House Communities Group, which comprised almost 13,000 beds across 18 stabilized properties and has four projects in development, according to an announcement at the time. CPPIB and GIC each own a 47.5 percent stake in the portfolio, and Scion owns the remaining 5 percent.