Worried About Student Accommodation? Singapore's GIC Isn't As It Backs Unite Students For Another 10 Years
Singapore sovereign wealth fund GIC has extended its joint venture with Unite Students for another 10 years.
The 50:50 venture, focused on London student accommodation, had net assets of £814M at the end of last year. The funding arrangement will now extend to September 2032. The original 10-year deal was due to end next year, an official statement said.
The deal was inked despite concerns in some parts of the purpose-built student accommodation sector that rental guarantees could pose problems for some developers and operators.
The renewed relationship will allow opportunities to expand the existing London arrangement through new acquisitions, the partners said.
The portfolio includes 5,300 beds in 12 locations in London along with 3,100 beds at the Aston Student Village, Birmingham, which will now be combined.
The deal includes the cash payment of up to £40M in performance fees by the end of this year.
Unite will continue to act as property and asset manager for the duration of the new joint venture on existing terms and fee levels.
Unite's relationship with GIC is one of the deepest in the PBSA sector, dating back to 2005.
"The transaction provides a strong endorsement of our sector-leading operating platform from GIC, a high-calibre investment partner with whom Unite has enjoyed a successful relationship since 2005," Unite Students Chief Executive Richard Smith said. "The realisation of the performance fee in 2021 reflects a combination of strong development returns and rental growth by the London portfolio since 2012.”
In March Unite sold off a portfolio of eight properties, comprising 2,284 beds, for £133M.
The disposal portfolio, which includes properties in Birmingham, Exeter, Manchester, Coventry and Wolverhampton, was sold to a fund managed by Aventicum Real Estate.