Canada Pension Plan Investment Board, GIC and The Scion Group to Acquire University House Communities Group

04-Jan-16

Toronto, Canada/Singapore/Chicago, USA (January 4, 2016) – Canada Pension Plan Investment Board (“CPPIB”), GIC and The Scion Group LLC (“Scion”) announced today that they have formed a student housing joint venture entity, Scion Student Communities LP (together with its subsidiaries, “the Joint Venture”). The Joint Venture, through its subsidiary, UHC Acquisition Sub LLC, has signed an agreement to acquire University House Communities Group, Inc. (“UHC”), a leading student housing portfolio in the United States, for a total consideration of approximately US$1.4 billion, including the cost to complete current development projects, from InvenTrust Properties Corp.

Through the Joint Venture, CPPIB and GIC will each own a 47.5% interest in UHC. Scion will own the remaining 5%. The Joint Venture will pursue additional opportunities to acquire high-quality student housing assets primarily in Tier 1 university markets in the U.S.

UHC represents one of the highest quality and largest Class A national student housing portfolios in the U.S., including 18 stabilized and four communities in development, all in close proximity to their respective university campuses and comprising nearly 13,000 beds. The portfolio is concentrated among top-ranked U.S. universities with large student enrollment populations. Scion will manage and operate the portfolio.

“The UHC portfolio represents a valuable opportunity to enter the U.S. student housing sector with top-tier, well-located assets,” said Peter Ballon, Managing Director, Head of Real Estate Investments Americas, CPPIB. “This transaction enables us to gain immediate scale in the attractive U.S. student housing market. We look forward to working with GIC, an existing partner, and Scion, an experienced operator, on the UHC portfolio as well as future student housing investment opportunities in the U.S.”

Lee Kok Sun, Regional Head for Americas, GIC Real Estate, said, “The portfolio is of high quality and we expect it to generate steady cash flows moving forward. Our confidence in the U.S. student housing sector continues, given its positive fundamentals and potential. We are pleased to establish a partnership with Scion, one of the most active private operators and owners in the U.S. student housing sector, and CPPIB, a long-term investor aligned with our values. We look forward to working closely with them and believe our experience investing in student housing in Australia and the U.K. will add value to the joint venture.”

“Partnering with two of the world’s premier real estate investors is a wonderful opportunity for Scion,” said Robert Bronstein, Scion’s President. “This milestone is the result of Scion’s 15 years of intense focus on student housing, as well as the strong track record of investor returns we’ve been able to deliver. The InvenTrust portfolio is an ideal way to begin our venture with CPPIB and GIC and we are excited to welcome both UHC’s assets and its strong team into our company.”

The transaction is expected to close in mid-2016.