Scape leads student accommodation industry with $700m Urbanest purchase
Student accommodation in Australia is set for a new era, with the acquisitive Scape operation locking in its position as the dominant player with the $2 billion-plus purchase of the Urbanest portfolio that spans major capitals.
Student accommodation is coming into its own on the back of rise of tertiary education as one of the nation’s major export earners and it has become a major asset class, sought out by infrastructure and property investors.
Scape will cement its leading position once it finalises the Urbanest transaction in which it will buy a series of purpose-built student accommodation towers from M3 Capital Partners’ Evergreen Real Estate.
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While terms were not disclosed, the offer was pitched as the country’s largest portfolio sale this year and also displayed Scape’s capital raising abilities. In September it bought the Atira business from Goldman Sachs and Blue Sky for close to $700 million.
These new assets will sit alongside Scape’s existing network that includes some of the premiere student accommodation towers in Melbourne, Sydney and Brisbane.
In a combination with its operational platform and multi-billion-dollar development pipeline, the latest purchase puts Scape in a powerful position as Asian and European pension funds back its expansion.
The specialist assets are attracting hefty premiums as they operate on a different cycle to most commercial and residential real estate and global firms are chasing an exposure to the growing area. Student housing is a major asset class globally, including in Britain and the US, and the moves in Australia are part of the worldwide consolidation in the industry. Scape’s Australian PBSA Fund and its capital partners have entered into binding conditional contracts to buy the Urbanest portfolio and will settle next year.
The fund was set up in September in partnership with Scape’s cornerstone and anchor investor into its $500m second development fund, Allianz Real Estate, together with its cornerstone partner, AXA Investment Managers — Real Estate, and it will now include APG Asset Management.
The Dutch fund, APG, was a founding partner of Scape in 2015, backing both the Scape management platform and its initial funds.
The Urbanest purchase includes 6805 beds across 14 assets, primarily in Sydney and Melbourne, with an exposure to Brisbane and Adelaide.
Scape’s acquisition of the Atira business added six facilities in Melbourne, Brisbane and Adelaide, housing 3510 students, along with three development sites in Sydney, Melbourne and Perth.
Savills UK ran the process and Scape was advised by Moelis and Morgan Stanley.
The first of the Urbanest buildings opened in Brisbane in 2010 and is considered “first generation”. The most recent buildings opened on Swanston Street in Melbourne and Darling Square in Sydney are a further step up.
Scape global chairman Nigel Taee says acquiring Urbanest Australia would assist with its “ambitious plans to build out a global purpose-built student accommodation platform”.
Scape Australia executive chairman Craig Carracher said: “We are confident that the combination of our businesses and our people will offer the Australian education market the scale required to satisfy the growing demand from our students, universities and the broader education sector to support Australia’s leading position in the global education market,” he says.
This article originally appeared on www.theaustralian.com.au/property.
