SC Capital makes first investment from core-plus fund

The Singapore-based private equity real estate firm has chosen the student accommodation and education sector for its maiden investments from its debut core-plus vehicle in Asia.

SC Capital Partners, the Singapore-based private equity real estate firm, has invested a total of $70 million in two deals from its core-plus real estate fund in Asia.

The firm has acquired a student accommodation property in Australia for A$57 million ($44 million; €39 million) and a retail asset in Hong Kong for HKD 253 million ($32 million; €29 million). Both these deals are understood to have been officially closed late July. The firm declined to comment on the news.

Project Kensington is a 84,798 square foot student accommodation property in Sydney from which the firm is targeting gross returns of around 9 percent. The retail property in Hong Kong is spread over 26,900 square feet, and is fully leased to education and tutoring service providers. Gross IRRs of 9.9 percent are being targeted from this investment.

The SC Core Fund is SC Capital’s debut core-plus vehicle in the region launched in early 2015. The vehicle is open-ended in nature but the firm has set an initial fundraising target of $400 million. To that effect the firm has raised around $176 million in equity commitments from six investors, a source has told PERE. These include the Wyoming State Loan and Investment Board (SLIB), which has committed $100 million, the City of Phoenix Employees Retirement System (COPERS), and the retirement pension system of the City of Forth Worth in Texas.

In response to the increasing demand for core-plus investments from European institutional investors the firm has now expanded fundraising efforts to Europe.

A second closing is expected to be held in November.

SC Capital Partners has raised four opportunistic real estate funds in the region. For the latest in the series – Real Estate Asia Capital Partners (RECAP) IV – it hauled $850 million in equity in late 2014, making it the largest fund to have been raised by the firm. The fund has already made around 13 investments.