Future Fund-backed Greystar to buy GIC’s $1.6b student digs business
Singapore’s sovereign wealth fund GIC has ruled off a major coup on Australian shores, agreeing terms to sell its student accommodation business for a $1.6 billion gross price – or about three times the $568 million it spent on securing the investment from Singapore-listed real estate investment firm Wee Hur Holdings in 2022.
Street Talk can reveal South Carolina-based Greystar – which has about $US320 billion ($477 billion) of real estate and nearly a million units in its stables, but has been far less prolific locally – has secured exclusivity over GIC’s Australian student accommodation portfolio. The deal includes 5662 beds across seven towers in Sydney, Melbourne, Brisbane, Adelaide and Canberra.
Sources said GIC’s deal makers, led by managing director and head of real estate for Australia and New Zealand Richard Massey, had fielded unsolicited approaches from private capital firms including Blackstone over the past six months, before granting exclusivity to Greystar.
The Matt Woodland-led Greystar, advised by Macquarie Capital, is understood to be in the final stages of raising the capital required – split evenly between debt and equity – to bed down the deal.
The deal is understood to have been done at about a 5 per cent cap rate.
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Of note, Australia’s $224.9 billion sovereign wealth fund Future Fund is understood to have put up its hand for a sizeable allocation in Greystar’s equity raise for the deal, and is slated to emerge as the biggest investor in the deal.
Wee Hur, which sold GIC a 49.99 per cent stake in the project in April 2022, will also retain a stake as GIC hands over ownership to Greystar. Sources said Greystar and its bankers at MacCap have also ruled off the debt portion, which was two-times oversubscribed.
At $1.6 billion gross value, it is a flagship deal for Greystar in Australia. Although the biggest owner of apartments in the US, the firm has only just dipped its toes into the Australian market starting with build-to-rent accommodation, where it has campaigned for a more conducive planning and taxation regime.
The GIC acquisition will sit alongside Greystar’s six other Australian projects with about 2500 apartments. It previously raised $1.3 billion to bankroll its expansion in Australia.
As for GIC, it is bidding farewell to the asset as new legislation – due to be considered at the parliament’s November sitting session – proposes capping international student enrolments at Australian universities to 270,000 for 2025 amid an anti-immigration push. After the deal, GIC will retain exposure to the Australian student housing sector via its investment in Iglu which it has held for a decade.
The deal comes as Campus Living Villages’ four superannuation fund owners – Hostplus, Rest Super, Equip Super and NGS Super – tap Goldman Sachs to shop the 27,100-bed portfolio to bidders. Interestingly, Greystar was among Campus’ bidders in a 2016 sale attempt.
