GIC, Macquarie Capital invest in Aussie student housing group

A joint venture between Singapore sovereign wealth fund GIC and Macquarie Capital has acquired a majority interest in Iglu, a Sydney-based student accommodation group with a roughly A$150 million (US$132 million) property portfolio, according to a joint news release Wednesday by GIC and Macquarie Capital.

Spokesmen for Macquarie and Iglu declined to provide further financial details of the deal. GIC spokeswoman Jennifer Lewis couldn’t immediately be reached for comment.

Jonathan Gliksten, Iglu director, in a telephone interview cited his firm’s partnership with GIC and Macquarie Capital as a sign that student accommodation — already an established asset class in the U.K. — is emerging as a focus for institutional investors now in Australia as well.

An influx of international students to Australia over the past decade or more is boosting demand for student housing, giving the asset class the “strong, reliable cash flow” that many institutional investors are seeking, Mr. Gliksten said.

Chris Green, Macquarie Capital’s global head of real estate, said in the news release that the shortage of student accommodation in Australia has left the sector with “excellent investment fundamentals.” Mr. Green couldn’t be reached for further comment.

Iglu, founded in 2010, has an operational 98-bed facility in central Sydney and another 395-bed facility in that city that opened for the 2014 academic year. In addition, the group has a 414-bed facility in Brisbane in “the detailed planning stage,” according to the news release.

Mr. Gliksten said the investment by GIC and Macquarie Capital will “really help us attack the gross shortages” of student accommodation, with an initial focus on state capital cities Sydney, Melbourne and Brisbane, and plans to develop further assets in cities such as Canberra and Adelaide in the future.

GIC, launched in 1981 to invest part of Singapore’s foreign-exchange reserves, has for many years restricted official comment on the size of its portfolio to saying it exceeds US$100 billion. By some estimates, its portfolio currently ranges between US$250 billion and US$300 billion.