CPPIB, GIC and The Scion Group Acquire 24 U.S. Student Housing Properties for US$1.1 Billion

Toronto, Canada/Singapore/Chicago, USA (January 3, 2018) – Canada Pension Plan Investment Board (CPPIB), GIC and The Scion Group LLC (Scion) announced today that their student housing joint venture, Scion Student Communities, LP (together with its subsidiaries, “the Joint Venture”), has acquired a U.S. student housing portfolio for approximately US$1.1 billion. The portfolio consists of 24 quality assets located in 20 diversified university campus markets across the U.S. comprising 13,666 beds.

The transaction includes the acquisition of 22 properties from affiliates of Harrison Street Real Estate Capital and the recapitalization of two communities previously owned by Scion-affiliated private syndications. The portfolio represents an attractive mix of recently developed Class-A properties in primarily tier-1 university markets as well as select value-added assets.

Since its inception in January 2016, the Joint Venture has completed over US$4.0 billion of investments primarily through four significant portfolio transactions, in which approximately US$1.4 billion in equity capital has been deployed. CPPIB and GIC each own a 45% interest in the newly acquired portfolio and Scion owns the remaining 10%.

“This is a compelling investment opportunity to efficiently build further scale in the U.S. student housing sector with a portfolio of high-quality, well-located properties in new and existing joint venture markets,” said Hilary Spann, Managing Director, Head of Americas, Real Estate Investments, CPPIB. “We believe the secular strength of the U.S. student housing sector will continue to deliver attractive risk-adjusted returns for the CPP Fund, and we look forward to continue growing the joint venture with GIC and Scion.”

The Joint Venture’s well-diversified national portfolio now includes 73 student housing communities in 52 top-tier university markets, comprising 46,555 beds. The average effective age of the portfolio is less than five years and over 70% of the assets are located within one mile of their respective campuses.

Lee Kok Sun, Chief Investment Officer, GIC Real Estate, said, “As a long-term investor, we are pleased to acquire this quality portfolio with good cash yields. We remain confident in the student housing sector, and in our partnership with Scion and CPPIB which has enabled us to scale-up quickly our U.S. student housing portfolio. We will continue to work closely with our partners to pursue value opportunities in the U.S.”

The Joint Venture will continue to pursue additional opportunities to acquire high-quality student housing assets primarily in tier-1 university markets in the U.S.

“This transaction is particularly strategic, providing for the addition of six properties in markets in which our joint venture already has a presence. This is consistent with our strategy to concentrate our investments in targeted markets by owning multiple properties with diverse product types and rental price point options,” said Robert Bronstein, Scion’s President. “We appreciate the continued confidence and support of GIC and CPPIB implicit in the substantial investment activity completed by our joint venture during its first two years of operation.”