Allianz announced today that it has partnered with Scape Australia (“SAF”) to establish “Scape Australia JV 2”, an AUD-denominated, closed-ended fund (the “Fund”) targeting the purpose-built student accommodation (“PBSA”) market in Australia.
The transaction was conducted by Allianz Real Estate - the EUR 56 billion real estate investment and asset manager of the Allianz Group, on behalf of several Allianz companies. Allianz will own 50% of the Fund, and the remainder will be held by like-minded long-term institutional investors. The Fund is targeting to raise AUD 500 million (EUR 315 million) in equity.
The Fund’s strategy is to leverage structural demand for PBSA across six tier one cities to build a long-term, cash flow producing portfolio by investing in a blend of develop-to-core, and stabilized or stabilizing assets. The six target cities are Sydney, Melbourne, Brisbane, Perth, Canberra, and Adelaide.
Rushabh Desai, Asia-Pacific CEO of Allianz Real Estate, noted, “Education has become the third largest export sub-sector for Australia and the purpose-built student accommodation market is markedly underpenetrated relative to UK and US. The proportion of students staying in purpose-built student accommodation is likely to grow significantly as the market increasingly appreciates the benefits of a lodging solution that is purpose-built and designed for students. Most of this demand is expected to be concentrated in Australia’s tier one cities."
“We have partnered with a best-in-class local operator to take advantage of this favorable environment. Scape Australia’s developer/operator model is vertically integrated to oversee all aspects of deal sourcing, design & build, development management, project management, asset management and investment management.”
“Our global AUM currently sits at over EUR 56 billion and our target is to hold 5% to 10% of it in Asia-Pacific. This transaction is particularly exciting as it marks our first investment in student housing in the region and complements our fast-growing global allocation to this dynamic sector,” said Olivier Teran, CIO Allianz Real Estate.
Scape Australia, established in 2013 is a privately-owned owner & operator of PBSA in Australia and part of the Scape global group (“Scape”). Scape was created as a new alternative to traditional student accommodation. Scape delivers a vibrant community for student living, creating an integrated environment where students “live, learn, work and play”. Managing the entire life cycle of each asset to ensure the best levels of pastoral care and branded service for students, Scape plays a vital role in the key elements of Design, Build, Operate and Finance.
Stephen Gaitanos, Scape Co-Founder & Managing Director of Scape Australia said, “After successfully deploying approximately AUD 600 million in our Scape Australia JV 1 fund across 11 developments over the last 3 years, and with 3 assets now operating in Sydney, Melbourne and Brisbane for over 1,600 PBSA bedrooms, we are excited to partner with Allianz Real Estate to take the platform to the next level.”
“We are delighted to welcome Allianz Real Estate, their team and the Allianz brand as our major, long-term capital partner. We have continued to develop our best in class student service, real estate development and investment management capability and are well positioned to take advantage of our strong global brand, local profile and best in class branded student service to our domestic and international students.”
“We are uniquely positioned to capitalize on opportunities to become a leader in the PBSA sector in Australia. Our global brand and prime locations continue to assist us in partnering with best in class, experienced, active and highly credible global partners like Allianz Real Estate.”
DLA Piper and Ernst & Young acted as advisors to Allianz. Herbert Smith Freehills advised Scape.