<article><a style="color: #000080;" href="http://dealstreetasia.com/tag/cppib" target="_blank">Canada Pension Plan Investment Board (CPPIB)</a>, Singapore fund <a style="color: #000080;" href="http://dealstreetasia.com/tag/gic" target="_blank">GIC</a> and <a style="color: #000080;" href="http://thesciongroup.com/" target="_blank">The Scion Group LLC (Scion)</a> have acquired three US student housing portfolios for approximately $1.6 billion. </article>

<a style="color: #000080;" href="http://dealstreetasia.com/tag/cppib" target="_blank">Canada Pension Plan Investment Board (CPPIB)</a>, Singapore fund <a style="color: #000080;" href="http://dealstreetasia.com/tag/gic" target="_blank">GIC</a> and <a style="color: #000080;" href="http://thesciongroup.com/" target="_blank">The Scion Group LLC (Scion)</a> have acquired three US student housing portfolios for approximately $1.6 billion. 
This acquisition was through their student housing joint venture (JV) entity, Scion Student Communities LP. 
These portfolios comprise: $385 million acquisition of six Class-A properties located primarily in the southern U.S.; $640 million acquisition of 11 Class-A properties in premier university markets across the U.S.; and $550 million in recapitalisations of 12 legacy Scion-owned and operated communities situated in leading campus markets across the U.S.
Since its inception in January 2016, the JV has completed $2.9 billion of investments, including the previously announced $1.3 billion acquisition of University House Communities Group and its 19 properties in June 2016. 
To date, the JV has deployed over $1 billion in equity capital. CPPIB and GIC each own a 45 per cent interest in the three portfolios and Scion owns the remaining 10 per cent. The JV&#8217;s well-diversified national portfolio now includes 48 student housing communities in 36 top-tier university markets, comprising 32,192 beds. 
The average age of the properties is less than five years and over 75 per cent of the assets are located within one mile of their respective campuses. Hilary Spann, Managing Director, Head of U.S. Real Estate Investments, CPPIB, comments: &#8220;The U.S. student housing sector is an attractive investment opportunity, driven by secular strength in enrollment growth and favourable supply dynamics.&#8221; 
CPPIB is an investment agency that invests the funds not needed by the Canada Pension Plan (CPP), with the CPP Fund totaling C$298.1 billion ($222.9 billion) as at December 2016, to pay current benefits on behalf of 19 million contributors and beneficiaries. It invests in public equities, private equities, real estate, infrastructure and fixed-income instruments. 
The JV will pursue additional opportunities to acquire high-quality student housing assets primarily in Tier 1 university markets in the U.S. A Savills <a style="color: #000080;" href="http://pdf.euro.savills.co.uk/global-research/spotlight-world-student-housing-2016-2017.pdf" target="_blank">report</a> on student accommodation notes trends in student enrolment are diverging, with strong growth recorded in Australia, Germany and France, with US cities &#8220;by far the most expensive in which to study and live, followed by the UK and Australia.&#8221;
<figure id="attachment_67817" aria-describedby="caption-attachment-67817" style="width: 700px" class="wp-caption aligncenter"><a href="http://www.dealstreetasia.com/wp-content/uploads/2017/03/savills_student_accomodation_investment.png" rel="attachment wp-att-67817"><img loading="lazy" decoding="async" class="wp-image-67817 size-full" src="http://www.dealstreetasia.com/wp-content/uploads/2017/03/savills_student_accomodation_investment.png" alt="savills_student_accomodation_investment" width="700" height="372" srcset="https://media.dealstreetasia.com/uploads/2017/03/savills_student_accomodation_investment.png?w=700 700w, https://media.dealstreetasia.com/uploads/2017/03/savills_student_accomodation_investment.png?resize=768,408 768w" sizes="(max-width: 700px) 100vw, 700px" /></a><figcaption id="caption-attachment-67817" class="wp-caption-text">Credit: Savills World Research. Spotlight World Student Housing 2016/17</figcaption></figure>
Given the cost advantage of mainland Europe and demand from international students, GIC is likely to grow its portfolio and corresponding assets in Europe, particularly Germany, in the long term. GIC is the sovereign wealth fund (SWF) of Singapore, investing across a wide range of asset classes, including real estate, private equity, equities and fixed income.
It has made previous investments in the student accommodation space, having engaged in transactions aimed at <a style="color: #000080;" href="http://www.dealstreetasia.com/stories/54773-54773/" target="_blank">developing its student accommodation portfolio in Germany</a> as well as <a style="color: #000080;" href="http://www.dealstreetasia.com/stories/gic-venture-buys-u-k-student-housing-properties-from-oaktree-54442/" target="_blank">in the UK</a> in 2016.
According to estimates by PERE, a November 2016 <a style="color: #000080;" href="https://www.perenews.com/uploadedFiles/PERE/Non-Pagebuilder/Aliased/News_And_Analysis/2016/November/Magazine/PERE1116_Global%20investor%2030%20supplement.pdf" target="_blank">supplement</a> estimated that GIC had conducted $6.2 billion in global asset acquisitions for 2016 and had capital commitments of $22.05 billion in real estate. The SWF Institute estimates that the fund has $350 billion of assets under management as at June 2016, while PERE estimates it at $315 billion.
GIC has been negotiating problems arising from low returns amid low bond yields and global macro volatility, achieving an annualised 4 per cent real rate of return from its investment portfolio in the 20-year period ending 31 March 2016, down from 4.9 per cent in 2014.
Adam Gallistel, Regional Head of Americas, GIC Real Estate, said, &#8220;These high-quality, revenue-generating assets are good additions to our global student housing portfolio. We remain confident in this sector&#8217;s long-term fundamentals and are pleased to continue our strong partnership with Scion and CPPIB.&#8221;
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A JV involving GIC and CPPIB has acquired student housing assets worth $1.6B in the US. 

CPPIB-GIC JV acquires US student housing assets for $1.6b

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CPPIB-GIC JV acquires US student housing assets for $1.6b

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