GIC, Mapletree, and SPH: Top Players’ Investment Strategy in the Global Student Housing Market

INVESTMENT_INSIGHT
August 21, 2020

GIC, Mapletree, and SPH: Top Players’ Investment Strategy in the Global Student Housing Market

It is observed that institutional investors such as GIC, Mapletree, and SPH have been recognized as active global investors for the student accommodation sector in recent years.




GIC Case

GIC, a Singaporean sovereign wealth fund is the 2nd biggest global investor in PBSA(Purpose-Built Student Accommodation) with S$6.2bn as of 2019 next to the Greystar, as reported by Savills.


[Top investors in student accommodation (2016-2018)]


GIC’s Major PBSA Investment Deals

GIC established a joint venture with the Canada Pension Plan Investment Board (CPPIB) and The Scion Group (a US-based student housing operator) ranked #3 and #4 top investors in student accommodation by total investment from 2016-2018. Much of GIC’s activity has since been via this joint venture, with notable deals including a $1.1bn purchase of a portfolio.


  • In 2018, CPPIB, GIC and The Scion Group Acquired 24 U.S. Student Housing Properties consisting of 13,666 beds in the US for about US$1.1 billion.
  • In 2017, Unite & GIC Acquired 3,067-Bed Aston Student Village for £227 million.
  • In 2016, Canada Pension Plan Investment Board, GIC and The Scion Group to Acquired University House Communities Group for £227 million.
  • GSA and GIC acquired a portfolio of 7,150 UK student beds from Oaktree in 2016.


  • Source: GIC, Savills



    Mapletree Case

    Index

  • Mapletree Investments’ Performance Highlights for FY19/20
  • Mapletree's Student Accommodation Portfolio
  • Mapletree’s Recent PBSA acquisitions in the UK
  • Outlook for PBSA according to Mapletree

  • Mapletree Investments’ Performance Highlights for FY19/20

  • Mapletree's revenue for FY19/20 rose to S$3,877 million and Mapletree’s assets under management (AUM) grew to S$60.5 billion in FY19/20.
  • In FY19/20, the Group continued to broaden its presence by successfully making acquisitions of data centre, logistics, office and student accommodation assets in Australia, China, Europe, India, the United Kingdom and the United States.

  • Mapletree's Student Accommodation Portfolio

  • Mapletree's student accommodation portfolio – including those held under MGSA(Mapletree Global Student Accommodation Private Trust) and Mapletree Investments – comprises a total of 50 Purpose-Built Student Accommodation (PBSA) assets with over 22,000 beds located across 33 cities in the United Kingdom (UK), the United States (US) and Canada.
  • Including projects under development, the total assets under management (AUM) amount to approximately S$3.6 billion.
  • MGSA currently holds 25 assets in the UK and 10 assets in the US, with a total AUM of about S$2 billion.

  • Mapletree’s Recent PBSA Acquisitions in the UK

  • Making further inroads into the student accommodation sector, Mapletree acquired two Purpose-Built Student Accommodation (PBSA) assets in the UK in October 2019.
    • Both are located close to Coventry University, which ranks among the top 15 universities in the UK. Located near Coventry University in the UK, Calcott Ten and Millennium View offer a combined total of 1,127 beds.
    • Mapletree also completed its first UK lodging development project, Westwood Student Mews, in December 2019. The 453-bed development is one of the nearest private PBSAs to the University of Warwick. These three student accommodation assets will enhance Mapletree’s visibility in Coventry, the UK.


    Outlook for PBSA according to Mapletree

    Overall, the medium- to long-term outlook for the student housing sectors in both the UK and US remains fundamentally attractive due to demographic growth, rising participation rates for higher education, and supportive government policies, which allow for a growth in international student numbers over the next decade.


    Source: Mapletree Annual Report 2019/2020


    SPH Case

    - SPH(Singapore Press Holdings), a leading player in the PBSA sector in the UK

    Index

  • SPH's Student Accommodation Portfolio
  • SPH's Recent PBSA acquisitions
  • SPH's PBSA Acquisitions to Date
  • Outlook for PBSA according to SPH

  • SPH's Student Accommodation Portfolio

  • Singapore Press Holdings Ltd (SPH) has expanded PBSA portfolio to 7,726 beds across 28 assets in 18 cities in the United Kingdom (UK) and Germany, with a carrying amount in excess of S$1.4 billion as of 2019 Dec.
  • As of April 2019, the group has expanded PBSA portfolio to 5,059 beds across 20 assets in 10 cities in the United Kingdom (UK) only, establishing SPH as a leading player in the PBSA sector in the UK.

  • SPH's Recent PBSA Acquisitions

  • Since SPH’s initial acquisition of PBSA in September 2018, the portfolio has grown significantly. SPH’s latest acquisition was in Dec. 2019, adding £448 million worth of assets.
  • Boosts recurring income with defensive cash-yielding assets considering that UK PBSA portfolio contributed S$15.0 million recurring income for FY19.

  • SPH's PBSA Acquisitions to Date



    Outlook for PBSA according to SPH

    The group expects the British student accommodation sector to continue to grow, with overall investor interest remaining strong. According to the 2019 annual report of SPH, it is mentioned that they will continue to seek international acquisitions in PBSA.


    Source: SPH Annual Report 2019, SPH Investor Relations


    Though UK PBSA could be an attractive investment with long-term fundamentals, it has been inaccessible to retail investors due to limited capital, research, time and middlemen agents (brokers, legal, tax and etc.) This makes investing in properties reserved only for sophisticated investors.


    However, Shareable Asset provides any size of global real assets through fractional ownerships. It allows all investors to directly own a portion of high-quality assets while earning returns similar to purchasing the entire asset starting from as low as $100.


    The rental income and capital appreciation structure is the same as one would buy real physical property. For rental income, it will be divided proportionally based on the % share that investors own so that investors enjoy annual yield on a monthly basis, the same process as one would buy real physical property. For capital appreciation, it allows retail investors to access lucrative projects such as UK prime properties.


    In conclusion, with Shareable Asset, now everyone could access high-quality investment opportunities anytime, anywhere.


    Start your investment journey with SA’s UK student accommodation here.


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