The real estate investment arm of the Chinese financial services group ICBCI International Holdings has invested in the Australian student accommodation joint venture between APG Asset Management and Scape Living.
APG has also re-upped its investment in the joint venture partnership. Following the upsize and ICBCI’s investment commitment, the joint venture has now reached A$310 million (€200.6 million; $220.5 million). APG’S interest in the JV remains 50 percent.
With the added commitments, the joint venture now has the capacity to fund an A$650 million development pipeline, according to a statement released by the JV partners.
APG and Scape Living, a student accommodation platform with roots in London, formed the 50:50 partnership in January this year to develop, own and manage direct-let student accommodation facilities across Australia. The initial combined investment by the two partners was A$220 million. That amount has been fully earmarked for the development of student accommodation facilities across five locations in Melbourne and Brisbane.
“We are pleased to grow our partnership with Scape in the Australian student accommodation sector,” said Sachin Doshi, managing director and head of private real estate investments, Asia Pacific for APG. “We continue to see tremendous opportunities in this asset class in Australia’s main education hubs and welcome ICBCI to this venture. Supported by strong underlying fundamentals, student accommodation presents arguably the most attractive risk-adjusted returns in Australia at this point and is a sector in which we are looking to expand further.”
“We welcome ICBCI as a partner and are excited about the future. Both APG and ICBCI have a very strong track record of investing in the region and bring unique skills and relationships to Scape. They also share our long term vision for the student accommodation sector in Asia Pacific, which aligns us nicely with each other as partners,” said Stephen Gaitanos, chief executive officer of Scape in Australia.
The construction of the first student accommodation property in the joint venture, in Melbourne’s central business district and opposite the RMIT University, is scheduled to begin in November. Two more properties adjacent to this property have also been acquired via the JV. This will allow Scape to create an integrated student accommodation off-campus facility in Melbourne that will have over 1,500 bedrooms. The 800 studio room project in Brisbane is also expected to receive development approval in November.
The joint venture partnership marked APG’s foray into the student accommodation sector in the Asia-Pacific region. In Australia, the last investment made by the firm was the acquisition of a 10 percent interest in Towers 2 and 3 in the Barangaroo South project in Sydney’s central business district from Lend Lease in early 2014.