Toronto,
Canada/Singapore/Chicago, USA (January 3, 2018) – Canada Pension Plan
Investment Board (CPPIB), GIC and The Scion Group LLC (Scion) announced today
that their student housing joint venture, Scion Student Communities, LP
(together with its subsidiaries, “the Joint Venture”), has acquired a U.S. student
housing portfolio for approximately US$1.1 billion. The portfolio consists of 24 quality assets located
in 20 diversified university campus markets across the U.S. comprising 13,666
beds.
The transaction includes the acquisition of 22 properties from
affiliates of Harrison Street Real Estate Capital and the recapitalization of two
communities previously owned by Scion-affiliated private syndications. The
portfolio represents an attractive mix of recently developed Class-A properties
in primarily tier-1 university markets as well as select value-added assets.
Since its inception in January 2016, the Joint Venture has
completed over US$4.0 billion of investments primarily through four significant
portfolio transactions, in which approximately US$1.4 billion in equity capital
has been deployed. CPPIB and GIC each own a 45% interest in the newly acquired portfolio
and Scion owns the remaining 10%.
“This is a compelling investment opportunity to efficiently
build further scale in the U.S. student housing sector with a portfolio of high-quality,
well-located properties in new and existing joint venture markets,” said Hilary
Spann, Managing Director, Head of Americas, Real Estate Investments, CPPIB. “We
believe the secular strength of the U.S. student housing sector will continue
to deliver attractive risk-adjusted returns for the CPP Fund, and we look
forward to continue growing the joint venture with GIC and Scion.”
The Joint Venture’s well-diversified national portfolio now
includes 73 student housing communities in 52 top-tier university markets, comprising
46,555 beds. The average effective age of the portfolio is less than five years and over 70% of the
assets are located within one mile of their respective campuses.
Lee
Kok Sun, Chief Investment Officer, GIC Real Estate, said, “As a long-term investor, we are pleased to
acquire this quality portfolio with good cash yields. We remain confident in
the student housing sector, and in our partnership with Scion and CPPIB
which has enabled us to scale-up quickly our U.S. student housing portfolio. We
will continue to work closely with our partners to pursue value opportunities
in the U.S.”
The Joint Venture will continue to pursue additional
opportunities to acquire high-quality student housing assets primarily in tier-1
university markets in the U.S.
“This
transaction is particularly strategic, providing for the addition of six
properties in markets in which our joint venture already has a presence. This
is consistent with our strategy to concentrate our investments in targeted
markets by owning multiple properties with diverse product types and rental
price point options,” said Robert Bronstein, Scion’s President. “We appreciate
the continued confidence and support of GIC and CPPIB implicit in the substantial
investment activity completed by our joint venture during its first two years
of operation.”
About Canada Pension
Plan Investment Board
Canada Pension Plan Investment Board (CPPIB)
is a professional investment management organization that invests the funds not
needed by the Canada Pension Plan (CPP) to pay current benefits on behalf of 20
million contributors and beneficiaries. In order to build a diversified
portfolio of CPP assets, CPPIB invests in public equities, private equities,
real estate, infrastructure and fixed income instruments. Headquartered in
Toronto, with offices in Hong Kong, London, Luxembourg, Mumbai, New York City,
São Paulo and Sydney, CPPIB is governed and managed independently of the Canada
Pension Plan and at arm’s length from governments. At September 30, 2017, the
CPP Fund totalled C$328.2 billion. For more information about CPPIB, please visit www.cppib.com or follow us on LinkedIn, Facebook or Twitter.
About GIC
GIC is a leading global investment firm with well over
US$100 billion in assets under management. Established in 1981 to secure the
financial future of Singapore, the firm manages Singapore’s foreign reserves. A
disciplined long-term value investor, GIC is uniquely positioned for
investments across a wide range of asset classes, including real estate,
private equity, equities and fixed income. GIC has investments in over 40
countries and has been investing in emerging markets for more than two decades.
Headquartered in Singapore, GIC employs over 1,400 people across 10 offices in
key financial cities worldwide. For more information about GIC, please visit
www.gic.com.sg.
About The Scion Group
Scion is the United States’ largest privately-held
owner/operator of student housing communities. Scion’s current portfolio
includes 90 properties comprising approximately 56,500 bedrooms, plus
management of two university-affiliated communities with an additional 2,200
bedrooms. Scion has focused exclusively on the student housing sector since its
inception in 1999 and has invested in over $6 billion of student housing
projects. For more information about Scion, please visit www.thesciongroup.com.
Article Contacts
CPPIB
Dan Madge
Senior Manager, Media Relations
T: +1 416.868.8629
Mei Mavin
Director, Global Corporate Communications
T: +44
203 205 3406
GIC
Tess
Chia
Vice
President, Communications
T:
+65 6889 8653
Mah
Lay Choon
Senior
Vice President, Communications
T:
+65 6889 6841
Scion
Avi Lewittes
Chief Investment Officer
T: +1 312.896.7968