Venture Which Includes Singapore Wealth Fund GIC, Canadian Public Pension Fund Has Now Amassed $2.9 Billion in Investments Over Past 14 Months
A joint venture of Chicago-based student housing developer The Scion Group, Canada Pension Plan Investment Board (CPPIB) and Singapore wealth fund GIC have purchased three U.S. student housing portfolios for about $1.6 billion.
Scion Student Communities LP's acquisitions include a total of 29 properties in three portfolios, including the closing this week of the $640 million purchase of 11 properties in university markets across the U.S.
Nine of the 11 properties totaling about 5,000 beds, were acquired for $465 million from four different funds connected with operating partnerships controlled by Harrison Street Real Estate Capital. The Harrison Street-controlled properties include off-campus housing at the University of South Florida, Indiana University, University of Wisconsin, Florida State University, University of Alabama, University of Virginia, Western Washington University, and California State University, Sacramento.
The acquisitions announced by the joint venture today also include the $385 million acquisition of six properties located in the South; and $550 million in recapitalizations of 12 Scion-owned and operated communities in leading campus markets across the U.S.
CPPIB and GIC will each own a 45% stake in the three portfolios and Scion Group will own the remaining 10%. The JV plans to buy more U.S. student housing properties.
The JV has now completed $2.9 billion of investments since it was formed in January 2016, including the previously announced $1.3 billion acquisition of University House Communities Group and its 19 properties in June 2016. The venture has deployed over $1 billion in equity capital.
"The U.S. student housing sector is an attractive investment opportunity, driven by secular strength in enrollment growth and favorable supply dynamics," said Hilary Spann, managing director and head of U.S. real estate investments for CPPIB. "Achieving scale in this sector is an important global investment objective for CPPIB."
The Scion JV's national portfolio now includes 48 student housing communities in 36 university markets totaling 32,192 beds. The average age of the properties is less than five years and over 75% of the assets are located within one mile of their campuses.
"We remain confident in this sector’s long-term fundamentals and are pleased to continue our strong partnership with Scion and CPPIB," said Adam Gallistel, regional head of the Americas for GIC Real Estate.
Editor's note: This update includes addtional details about the $640 million segment of the JV's purchase.