A joint venture that includes the Canada Pension Plan Investment Board has acquired three student housing portfolios across the United States for more than $2.1 billion.
Along with Singapore’s GIC Private Ltd. and student housing company the Scion Group, the CPPIB is investing in six properties located in the southern United States for $518 million and 11 locations in what it calls premier university markets for $860 million. The deal also includes recapitalizations of 12 Scion-owned communities in U.S. campus markets for $740 million.
“The U.S. student housing sector is an attractive investment opportunity, driven by secular strength in enrolment growth and favourable supply dynamics,” said Hilary Spann, managing director and head of U.S. real estate investments at the CPPIB.
“Achieving scale in this sector is an important global investment objective for CPPIB, and we are pleased to further this goal in the United States with our partners at GIC and Scion.”
The CPPIB and GIC each own 45 per cent and Scion holds 10 per cent of the portfolios.
Since January 2016, the joint venture has invested about US$2.9 billion and deployed more that US$1 billion in equity capital. In June 2016, the venture acquired University House Communities Group, which comprises 19 properties, for US$1.3 billion.
Currently, the joint venture owns 48 student housing communities in 36 university markets. The portfolio comprises 32,192 beds, according to a news release.