Canada Pension Plan Investment Board is in exclusive talks to buy Blackstone’s Victoria Student Housing platform for £455m – a 5% yield.
It has fought off competition from Goldman Sachs and Welcome Trust’s Vero and a joint venture between GSA and Singaporean sovereign wealth fund GIC.
CPPIB is close to securing a deal for the 7,921-bed portfolio, which includes 32 assets across 11 cities in the UK and Ireland including Birmingham, Bristol, Liverpool and London. It does not include three Victoria Hall assets in Germany, Ireland and Spain.
The Victoria Student Hall portfolio represents the largest student accommodation deal this year, eclipsing Avenue Capital’s £420m sale of its 6,000-bed portfolio to new entrant Brookfield Property Partners in February. Investment in the student accommodation sector is set to reach £3.1bn in 2016, making it the second highest year on record, according to Cushman & Wakefield.
The management business of Victoria Hall is also included in the deal. This gives CPPIB the opportunity to reposition the properties to its Liberty Living Platform, which would make it one of the largest student housing operators in the UK, with 26,774 beds.
CPPIB first entered the student housing sector when it acquired the £1.1bn Liberty Living platform from the Brandeaux Student Accommodation Fund, which comprised 16,700 beds.
It has since looked to scale up the business and acquired Student Castle, a portfolio of five assets totalling 2,153 beds, from Round Hill Capital for £330m in August last year.
It has since been looking to bolster its platform and was part of a competitive bidding process for Oaktree Capital Management’s Threesixty Developments, which included 7,150 beds. It was ultimately bought by student developer GSA and Singapore’s sovereign wealth fund.
JLL advised Blackstone; CPPIB was unrepresented.
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