Allianz Real Estate is close to securing a deal to acquire a 40% stake in Canada’s Public Sector Investment Board and Greystar’s student housing platform Chapter, which is valued at £1.5bn.
A deal would reflect a circa £350m cash injection from Allianz into the platform, which is 90% owned by PSP and 10% owned by asset manager Greystar.
The C$116.8bn pension fund decided to sell part of the business a year ago.
A deal with Allianz will likely see Greystar retained as asset manager of the London-based portfolio, which comprises 5,100 beds across assets including Spitalfields, Islington, Lewisham, Aldgate and King’s Cross.
While PSP is normally a long-term investor with steady income streams, the surge of interest in the student accommodation sector prompted it to explore options for the future of the business last year.
Chapter is looking to double its existing portfolio over the next five years, and cash raised from the sale of this stake will likely be re-invested into the business to fund its expansion through acquisition and development.
When EG spoke to Stephane Jalbert, PSP’s managing director of investments in September last year, he said of its search for a partner: “We are not in a hurry. The right partner is important.
“We still believe in [student housing] for the long term in London. Our business plan is mostly zones 1 and 2, which is where we think there will be the highest concentration of international students who will be driving growth, and where there is a lack of purpose-built, well-functional student housing properties.”
Allianz Real Estate has previously invested in student housing, including backing International Campus’s €1bn European student housing fund alongside CBRE Global Investment Partners. However, this deal would mark its UK debut for a student housing deal of this kind.
Allianz’s chief investment officer Olivier Teran hinted that it would be looking to explore further partnership opportunities in the student housing market in its annual results for 2017 which were released earlier this month.
In a statement he said: “Partnerships are a core element to the way we do business and 2017 saw us deepening relationships with a number of third-party managers and joint venture partners. This approach enables us to increase our exposure to new markets and fast-growing sectors such as logistics and student housing.”
Eastdil Secured is acting for PSP and Greystar.
By Amber Rolt and David Hatcher
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