Goldman Sachs in A$1bn student housing JV

The investment banking giant has teamed up with Brisbane-headquartered alternative asset manager Blue Sky to build a portfolio of purpose-built student accommodation across Australia and New Zealand.

Goldman Sachs has formed a A$1 billion (€674 million; $760 million) student accommodation joint venture with Brisbane-based alternative asset manager Blue Sky.

The pair have an equal partnership in the JV and intend to use the capital to build a portfolio of 5,000 to 10,000 purpose-built student accommodation beds across Australia and New Zealand over the next few years.

Blue Sky had been building a student accommodation platform investment strategy since 2014 and has grown the development pipeline to more than 3,000 beds across the country.

“Education is Australia's largest non-resource export industry, worth in excess of A$18 billion per annum and growing. The ability to scale further into this domestic thematic, in part due to the region's proximity to a rapidly expanding Asian middle class, is a key focus for the partnership,” Adam Vaggelas, investment director in Blue Sky's private real estate division, said.

While the Blue Sky partnership marks Goldman Sachs' entry into the Australian student market, the firm has been active in the European student market for a number of years.

In January the firm formed a JV with Greystar Real Estate Partners and London-based charity, Wellcome Trust, to launch a new student housing company, Vero Group.

The joint venture consolidates two of the UK's student accommodation brands; iQ, owned by the Wellcome Trust, and Prodigy Living, owned by Goldman and Greystar, into one company with a nationwide presence.