AXA IM - Real Assets, acting on behalf of its clients, announces that one of its joint ventures, known as the Australian Student Accommodation Program Joint Venture (ASAP JV), has entered into binding contracts to acquire Urbanest, the owner of Australia’s largest Purpose Built Student Accommodation (PBSA) portfolio. The Urbanest portfolio comprises 6,805 beds across 14 operational assets located in four major Australian cities and will now be operated by Scape, a leading global operator, owner and manager of student accommodation assets with whom the ASAP JV has an established partnership.
The Urbanest portfolio is well diversified by location, being split across Sydney, Melbourne, Brisbane and Adelaide, with an offering ranging from premium studios to affordably priced twin share rooms and apartments. The modern, institutional-grade portfolio has an average asset age of circa 4.5 years and offers a wide range of on-site services and amenities for students.
The ASAP JV’s pre-eminent portfolio of student housing assets in Australia will now total 10,315 beds, with the Urbanest acquisition adding to the recent acquisition of a 3,510-bed portfolio from the Atira Student Living platform in September 2019, which marked AXA IM - Real Asset’s entry into the Australian student housing market. The purchase price was not disclosed.
Kumar Kalyanakumar, Head of Australia at AXA IM - Real Assets, commented: “The Urbanest portfolio represents a rare and high-quality opportunity to grow our recently established joint venture, through investing in the supply-constrained and high demand Australian PBSA market. The sector has favourable demand drivers and growing institutional appeal, assets are tightly held and the barriers to entry are relatively high, particularly in Sydney, which makes this opportunity even more appealing. The acquisition provides the joint venture with immediate scale as the owner of the largest and most dominant PSBA portfolio in Australia which will benefit from both near and longer-term operational expenditure synergies. Furthermore, we expect that the consolidation of operators should lead to improved operations, branding, marketing and sector awareness. The acquisition continues our global approach of partnering with best in class local operators and we anticipate our relationship with Scape to be an important part of our strategy in extracting both income and capital growth from this portfolio, as well as accessing future investment opportunities. We have been attracted to the Australian student housing sector for some time, which is set to continue to benefit from Australia’s position as a leading destination for international students. Further, its livable cities and close economic and social ties with Asia will ensure it continues to benefit from this growing market. We have a near term ambition to grow our student housing exposure in Australia, and have identified a number of opportunities to deliver on this.”
Philippe de Martel, Head of AXA Equity Mandates, added: “We have a high conviction for alternative real estate classes given their expected superior risk-adjusted returns potential, ability to generate counter-cyclical income streams and the underlying fundamental growth drivers that support them. This acquisition again demonstrates our ability to deliver on our global expansion strategy and firmly establishes AXA IM - Real Assets as a major presence in the Australian real estate market, one of the top six pensions markets globally and one of the core real estate markets in Asia.”
