Ivanhoé Cambridge, a property arm of Canada’s second-biggest pension fund, has poured A$1 billion ($645 million) into Australia’s largest student accommodation fund which is managed by Australia-based rental residential operator Scape.
Dubbed as Scape Core Program, the fund currently manages a portfolio of 27 rental residential buildings and 13,000 rooms for college students, which are predominantly in Sydney and Melbourne, according to a joint announcement.
Ivanhoé, which manages a $79 billion portfolio of global real estate, is joining fellow institutional players such as Dutch pension fund APG Asset Management, real estate asset manager Allianz Real Estate, Netherlannd’s property investor Bouwinvest and global fund management AXA Investment Managers which are existing investors of the fund.
“We are pleased to enter into this new strategic partnership with Scape in the Australian student housing sector. This investment allows us to participate in the institutionalisation 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 at Ivanhoé 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 announcement of Ivanhoé’s capital injections comes only four months after the return of international students in Australia peaked in June with visa applications hitting record high, following the reopening of borders to welcome inbound travellers in February. The student housing sector has since seen a robust recovery as strong demand culminated in high occupancy with attractive potential for rental growth.
“We are excited to welcome Ivanhoé Cambridge as another high-calibre global investor to our platform. 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,” said Stephen Gaitanos, CEO and managing director, Scape Australia Group.
“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.”
With Agethan relocating from Hong Kong to helm Ivanhoé’s Asia-Pacific operations in Singapore earlier this year, the real estate vehicle of Caisse de dépôt et placement du Québec has been gearing up its investment pipeline toward the multifamily sector in the region.
In December 2021, Ivanhoé launched a $2 billion strategy for rental residential in Japan in conjunction with Allianz Real Estate with an equity commitment of $250 million to Allianz Real Estate Asia-Pacific Japan Multi-Family Fund I, which targets the acquisition of multifamily assets in Tokyo, Osaka, Nagoya and Fukuoka.