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CPPIB, GIC in $1.6bn US student housing deal

Harrison Street Real Estate Capital was one of the portfolio sellers in the joint venture’s latest deal.

The Canada Pension Plan Investment Board and Singaporean sovereign wealth fund GIC Private Limited have expanded their US student housing platform with three portfolio deals acquired for $1.6 billion.

In January 2016, CPPIB and GIC formed a joint venture, Scion Student Communities, with The Scion Group, a Chicago-based private owner and operator of student housing, to enter the US student housing market. The JV initially bought almost 13,000 beds across 18 properties for $1.4 billion, PERE previously reported.

In the JV’s latest deal, the groups purchased three additional portfolios: a $385 million purchase of six Class A properties in the southern US; a $640 million acquisition of 11 Class A properties across the US; and $550 million in recapitalisations of 12 legacy Scion-owned assets across the country. CPPIB and GIC each own a 45 percent interest in the portfolios and Scion owns the remaining 10 percent.

Harrison Street Real Estate Capital sold nine of the assets in the 11-property portfolio to the JV for $465 million, sister publication PERE has learned. The Chicago-based firm’s sale comprised about 5,000 beds at eight universities. The properties were owned by four different funds, according to the firm, which manages about $12.2 billion.

“Initially acquired as single assets or development opportunities, this portfolio consists of nine high-quality properties at which we were able to execute on our business plans often times ahead of schedule,” Harrison Street co-founder Christopher Merrill said.

The other portfolio sellers were not disclosed.

After the transaction, Scion’s portfolio now comprises about 32,000 beds in 48 student housing communities.

“These high-quality, revenue-generating assets are good additions to our global student housing portfolio,” GIC’s US head, Adam Gallistel, said. “We remain confident in this sector's long-term fundamentals.”