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Friday, April 12, 2024

Mapletree Buys $1.3B European Student Housing Portfolio From Cuscaden Peak

Student Castle Oxford is now part of Mapletree’s portfolio

Singapore’s Mapletree Investments continues to expand its global portfolio of student housing with the unit of Temasek Holdings announcing on Friday that it has acquired 31 purpose-built student accommodation (PBSA) assets in Europe from its compatriots at Cuscaden Peak Investments.

In a statement, Mapletree said that it is buying the 8,192-bed, UK-dominated portfolio in a $1.3 billion deal, bringing its global holdings in the sector to over 17,000 beds and also giving it ownership of the manager of the properties.

“The acquisition is part of Mapletree’s strategy to grow the student accommodation sector in the UK, the US, Europe and Australia, which remain underserved by quality student housing assets,” Mapletree group chief executive Hiew Yoon Khong said in a statement. He added that, “The student housing sector is one of the Group’s core real estate focus areas due to its fundamental demand-supply imbalance and defensive characteristics.”

In a report last year, Cushman & Wakefield found that rents for student accommodation in the UK rose by an average of 8.02 percent for the 2023-2024 academic year, with the supply of new  beds expanding by just 1 percent annually over the past two years.

OpCo and PropCo

As one of the largest shareholders in Cuscaden Peak, Mapletree is already familiar with the student housing properties in the transaction, which had been acquired by Singapore Press Holdings before that company’s property business was spun off and sold to Cuscaden Peak in March 2022 in a $2.9 billion deal ↗.

Mapletree Investments CEO Hiew Yoon Khong

The properties are located in 19 cities in the UK and Germany, including Bristol, Cambridge, Durham, Edinburgh, Oxford and York, as well as in the German city of Bremen, the company said.

The operating platform manages both the Student Castle and Capitol Students brands, and the acquisition will provide Mapletree with direct operational control of the acquired portfolio, which it sees enhancing its operational capabilities.

The Student Castle/Capitol Students platform achieved Platinum certification, the highest level possible under the Global Student Living rating system, which measures PBSA properties for their condition and amenities, value, management and other criteria.

“We will capitalise on the newly acquired operating platform to support our strategic vision of growing as well as enhancing our operational performance in the UK,” Mapletree’s Hiew added.

Following the deal Mapletree now owns 33,000 student housing beds across 47 cities in the UK, the US, Germany and Canada representing total assets under management of S$6.2 billion.

Bed Heads

The deal with Cuscaden Peak supercharges a student housing portfolio which Mapletree has been accumulating for several years. In 2017 the company raised $535 million ↗ to expand a PBSA portfolio which was already valued at $1.3 billion, including properties in the US and the UK.

Student Castle Brighton

Mapletree in 2019 was reported to be bidding for UK PBSA platform IQ Student and during that same year acquired a pair of Unite Students facilities ↗ in Coventry, England. In 2021 the company followed up with a purchase of four PBSA assets under the Vita Student brand ↗ in Nottingham, Leeds, Exeter and Bristol. Blackstone acquired IQ Student in 2020 for £4.7 billion.

In 2022, Mapletree was said to be picking banks for a Singapore-list REIT of its student accommodation assets. Despite widespread media reports of a potential IPO, no such REIT listing has occurred to date.

Familiar Portfolio

Among the properties acquired in the deal were Student Castle facilities in Oxford, Brighton and Durham, along with a Capitol Students location in Edinburgh.

In April 2019, Singapore Press Holdings paid £133.7 million to acquire a pair of student accommodation properties ↗ in Lincoln and Glasgow under the Capitol Students brand, marking its fourth acquisition in the UK’s student housing sector.

The company followed up in December that year by paying £448 million to acquire 2,383 beds under the Student Castle brand ↗, including facilities in Oxford, Brighton, Cambridge, Bath, Durham, Edinburgh and York.

Those deals came after SPH had acquired 14 UK properties under the Unite Students brand ↗ for $233 million in 2018.

Thin at the Peak

Since Mapletree teamed up with CapitaLand Group and Hotel Properties Ltd, along with the hospitality investment firm’s boss Ong Beng Seng, in 2022 to acquire SPH’s property business the firm has sold a number of assets, without making acquisitions to date.

Ong Beng Seng’s Cuscaden has been selling the SPH portfolio piece-by-piece

During March a joint venture led by Cuscaden Peak disposed of the Seletar Mall ↗ in northeastern Singapore for S$550 million ($410 million). Over the past two years the company has also sold landed Singapore luxury homes from the SPH portfolio for nearly S$237 million.

The student housing portfolio sold to Mapletree is understood to have represented the firm’s sole assets outside of Singapore. In the Lion City the firm holds a stake in the recently completed Woodleigh Residences condo project in the Bidadari area, along with its associated mall as its remaining direct holdings.

Cuscaden also sponsors Paragon REIT, which owns the Paragon mall in the Orchard area, the Clementi Mall, and the Rail Mall in Bukit Timah.

Michael Maren
Michael Maren
Former marine biologist who likes to spend as much time in the tropics as possible, due to a horrible time I once had in Alaska. Brrrr.

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