Scape partners with APG and Ivanhoe Cambridge for $1b student accommodation joint venture

Scape partners with APG and Ivanhoe Cambridge for $1b student accommodation joint venture

The proposed Gurrowa Place development in Melbourne's CBD

Scape Australia has formed a new partnership with Dutch pension investor APG Asset Management and global real estate investor Ivanhoe Cambridge to deliver a suite of purpose-built student accommodation projects, with the partnership seeding the joint venture with 1,000 apartments in the $1.7 billion Gurrowa Place development planned for Melbourne’s Victoria Markets precinct.

The partnership is the third since 2015 for Scape, Australia’s largest student accommodation provider which manages a portfolio of 17,200 apartments nationally.

It also bolsters the group’s plans with APG announced last year to develop a minimum of 10,000 rent-to-live apartments in urban, transport-oriented locations by 2030.

The Gurrowa Place project, approvals for which were granted to developer Lendlease Group (ASX: LLC) last week, is the first in a series of projects estimated to be worth $1 billion for Scape’s joint venture with APG and Ivanhoe Cambridge.

Gurrowa Place, to be developed on the Queen Victoria Markets precinct’s 3.2ha southern site bordered by Franklin, Queen and Peel streets, will comprise three towers including a 28-storey next-generation workplace, and will include about 560 build-to-rent apartments, in addition to 80 affordable homes.

While the new Scape partnership remains subject to regulatory approval, the student accommodation provider says it plans to leverage Australia’s resurgent international and domestic student market to address a shortage of student accommodation nationally.

“The strategy to develop and operate PBSA (purpose-built student accommodation) properties in key gateway cities in Australia is entirely in line with the urbanisation megatrend, which also aligns with our sustainability aspirations,” says APG’s head of Asia Pacific real estate Graeme Torre.

“The PBSA sector is often considered the entry level for young renters in the residential sector and as a consequence helps address important issue such as housing affordability and availability.

“Professionally managed student accommodation buildings with improved energy efficiency and carbon footprint support our goals around responsible impact investing.”

Torre says APG has previously developed a “very successful partnership” with the Scape team, while Ivanhoe Cambridge says the joint venture provides an opportunity to participate in the institutionalisation of the living sector in in the Asia-Pacific region.

“The exposure to this development JV complements our recent investment in Scape Core Program and will further diversify our APAC portfolio with defensive cashflows that are driven by the favourable demographics in the region and the demand for quality education in Australia,” says Ivanhoe Cambridge’s Asia Pacific head George Agethen.

Founded in 2014 by Stephen Gaitanos and Craig Carracher, Scape manages more than 36 property assets nationally and has 10 purpose-built student housing and urban living assets under development.

Stephen Gaitanos says the joint venture opportunity presented by the new partnership comes amid full occupancy across Scape’s existing portfolio, adding that there is a “clear need for more well designed and located rental accommodation in Australia”.

“We look forward to continuing to grow this new venture and development pipeline on our pathway as Australia’s largest end-to-end specialist residential rental and operating accommodation platform,” he says.

APG manages about €569 billion ($1.1 trillion) in pension assets, while Ivanhoe Cambridge, a real estate subsidiary of Canada-based investment group CDPQ, manages about C$77 billion ($85 billion) in real estate assets.

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