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Scape Quay on Quay Street in Sydney
With student visa applications in Australia having hit their highest level ever in June, according to government statistics, the country’s largest provider of university housing is welcoming the arrival of some fresh cash thanks to Canada’s Ivanhoe Cambridge.
The real estate investment division of Caisse de dépôt et placement du Québec is investing A$1 billion ($649 million) to join investors including APG Asset Management, Allianz, Bouwinvest and AXA in Scape Core Program, a venture which holds Australia’s largest portfolio of student accommodation, according to a statement on Thursday.
“This investment allows us to participate in the institutionalization of the living sector in APAC and support the provision of well-managed, high-quality housing for students,” said George Agethen, co-head of Asia Pacific for Ivanhoe Cambridge. “The exposure to the Scape Core Program will diversify our APAC portfolio with defensive cashflows that are driven by the favourable demographics in the region and the demand for quality education in Australia.”
The deal comes as residential rents in Australia jumped 10.3 percent over the past year, according to an industry report, and with applications for student visas in the first half of this year surpassing pre-pandemic levels, after the country began welcoming back foreign scholars from December.
Ivanhoe Cambridge’s investment gives it part-ownership in 27 student accommodation facilities holding over 13,000 beds, according to the statement, with those properties primarily located in Sydney and Melbourne.
George Agethen of Ivanhoé Cambridge speaking at the Mingtiandi Singapore forum last week
“We are excited to welcome Ivanhoe Cambridge as another high calibre global investor to our platform,” said Stephen Gaitano, chief executive and managing director of Scape Australia Group.
The joint statement by the two companies indicated that strong demand for student housing following Australia’s reopening has helped Scape achieve high occupancy and an attractive rental growth outlook for its properties.
“This comes at a very exciting time with high international student enrolments and a recovery of the PBSA (Purpose-Built Student Accommodation) sector as education remains a centrepiece of Australia’s global services exports,” Gaitanos added. “Together with recent aggregations in Australia we expect to see more consolidation and growth opportunity both in the student accommodation market and the residential for rent sector more broadly.”
Scape Lincoln College in Melbourne opened as the company’s 33rd Australian property and its 11th in the Victorian capital in July of this year, with local news reports indicating that Scape is planning an additional 300-unit facility on Leicester Street in the city.
With Scape also expanding into traditional rental housing for the broader market, just one year ago the company’s core strategy spent around A$95 million to acquire a 428-bed, three-building portfolio near the University of Technology Sydney, after an A$2 billion buyout of M3’s Urbanest in 2019.
For Ivanhoe Cambridge, the investment marks its latest commitment to the rental residential sector, as the Canadian giant joins the host of fund managers searching for higher earning opportunities in the face of rising interest rates and narrowing yields.
Stephen Gaitanos, managing director and group CEO of Scape
In February of last year Ivanhoe Cambridge had joined APG Asset Management and other investors in helping US multi-family giant Greystar reach a final close of A$1.3 billion on its Greystar Australia Multifamily Venture I fund.
Then in September of 2021 a Greystar strategy backed by Ivanhoe Cambridge and Bouwinvest acquired a Paris property as the first asset for a €1 billion student and young professional housing venture targeting the French capital.
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