Dexus lobs bid for big super’s Aussie student apartment portfolio
The $7.5 billion listed landlord Dexus has submitted a bid for the Australian portfolio of big super’s student housing player Campus Living Villages, which this year resurrected a failed $2 billion sale attempt from 2016.
Street Talk can reveal Dexus’s non-binding indicative offer, lobbed to sell-side adviser Goldman Sachs late last month, attempts to put together CLV’s circa 5700 beds and nine properties with the 7000 beds the fund manager already owns from its acquisition of AMP Capital’s real assets business two years ago. The two operate accommodation at rival universities in capital cities. As an example, CLV has RMIT in Melbourne, while Dexus has Australian National University.
Sources said Dexus’s infrastructure unit is leading the bid and is self-advised. Goldman Sachs is expected to shortlist bidders within days. Of note, Canadian giant Brookfield participated in the first round but withdrew despite its goal of building a $2 billion student housing portfolio in Australia. Two other bidder candidates, Plenary and Singapore’s GIC, did not submit bids.
US apartments giant Greystar has been touted as a logical suitor, but it is unclear if it is an active participant in the auction.
Sydney-born CLV’s portfolio contains 27,000 beds in Australia, United States and the United Kingdom. Suitors were given the option of submitting bids for 100 per cent or parts of the business. The auction, revealed by this column in March, has been a slow-going affair with buy-side mandates on short supply.
Sources said for-parts bids would involve high separation costs, and a 100 per cent bid could spell a much higher payday for CLV’s owners – Hostplus, Rest Super, Equip Super and NGS Super. However, the sell-side advisers’ reluctance to provide a fully stocked virtual data room had made submitting an all-of-company bid tough, the sources added.
CLV works in partnership with universities, as opposed to rivals like Scape, which is an off-campus owner and developer of student accommodation. Former Stockland Commercial Property boss John Schroder leads CLV’s C-suite.
Back in 2016, CLV was shopped with 45,000 beds and a $2 billion price tag by UBS to real estate and infrastructure investors, and attracted interest from Greystar and a Macquarie Capital-headlined consortium. However, seven months later the buyer hunt was called off, amid questions around whether CLV’s global portfolio needed to be broken up to attract a credible bid.
The student accommodation sector has just staved off a proposal from Labor to cap Australian universities’ foreign student intake, after a rare alliance between the Greens and the Coalition. Five big players – UniLodge, Scape, Campus Living Villages, Iglu and Wee Hur – control 80 per cent of Australia’s total supply in the sector, according to CBRE.
A sale of GIC and Wee Hur’s Australian portfolio to Future Fund-backed Greystar in October saw the 5662-bed portfolio fetch a $1.6 billion gross value.
