The deal also highlights the growing consolidation in student housing. In a recent Q&A with GlobeSt.com, Pierce Education Properties' CEO Fred Pierce pointed out that not only do the top 25 owners in the student-housing sector continue to dominate the asset class but their presence has been steadily growing with aggregate beds having increased 75% since 2010.

“The US student housing sector is an attractive investment opportunity, driven by secular strength in enrollment growth and favourable supply dynamics,” said Hilary Spann, managing director, Head of US Real Estate Investments for CPPIB in a prepared statement. Achieving scale in this sector is an important global investment objective for CPPIB, Spann added.

The Pure Play Push

This transaction — or rather, Scion Student Communities itself — is also illustrative of a recent propensity by real estate owners to focus on pure plays. Scion Student Communities was formed in 2016 when InvenTrust Properties Corp. sold its student housing platform — at the time it was called University House Community Group — in order to become a multi-tenant retail REIT. CPPIB, GIC and the Scion Group acquired it for around $1.4 billion.

That was at the start of last year. Since then, the JV has completed $2.9 billion of deals — including the $1.3 billion acquisition of University House Communities Group and 19 properties in June 2016 — and has deployed over $1 billion in equity capital. CPPIB and GIC each own a 45% interest in the three portfolios and Scion owns the remaining 10%.

The portfolio now has 48 student housing communities in 36 university markets for a total of 32,192 beds. The average age of the properties is less than five years and over 75% of the assets are located within one mile of their respective campuses. More acquisitions can be expected, the JV says.

CHICAGO–Scion Student Communities, a JV between the Scion Group, Canada Pension Plan Investment Board and Singapore's GIC, has acquired three separate US student housing portfolios for a total of $1.6 billion. The deal consisted of the acquisition of a $385 million portfolio holding six properties in the southern US and a separate $640 million acquisition of 11 properties throughout the US. Fannie Mae credit facilities were used to back both deals. Then, the transaction also recapped 12 legacy Scion communities for $550 million.

Multiple sellers were involved to merge these properties into one mammoth portfolio, with only some publicly disclosed. For example, nine of the properties in the 11-asset, $640 million deal were reportedly acquired from partnerships associated with Harrison Street Real Estate in Chicago. The Athens-based Dovetail Cos. reportedly was the seller of the six properties in the south for $385 million.

Growing Consolidation

There are many takeaways that can be made from this deal — the solid presence of foreign capital in commercial real estate and the fact that student housing has become the new darling of institutional investors — are two that come to mind.

The deal also highlights the growing consolidation in student housing. In a recent Q&A with GlobeSt.com, Pierce Education Properties' CEO Fred Pierce pointed out that not only do the top 25 owners in the student-housing sector continue to dominate the asset class but their presence has been steadily growing with aggregate beds having increased 75% since 2010.

“The US student housing sector is an attractive investment opportunity, driven by secular strength in enrollment growth and favourable supply dynamics,” said Hilary Spann, managing director, Head of US Real Estate Investments for CPPIB in a prepared statement. Achieving scale in this sector is an important global investment objective for CPPIB, Spann added.

The Pure Play Push

This transaction — or rather, Scion Student Communities itself — is also illustrative of a recent propensity by real estate owners to focus on pure plays. Scion Student Communities was formed in 2016 when InvenTrust Properties Corp. sold its student housing platform — at the time it was called University House Community Group — in order to become a multi-tenant retail REIT. CPPIB, GIC and the Scion Group acquired it for around $1.4 billion.

That was at the start of last year. Since then, the JV has completed $2.9 billion of deals — including the $1.3 billion acquisition of University House Communities Group and 19 properties in June 2016 — and has deployed over $1 billion in equity capital. CPPIB and GIC each own a 45% interest in the three portfolios and Scion owns the remaining 10%.

The portfolio now has 48 student housing communities in 36 university markets for a total of 32,192 beds. The average age of the properties is less than five years and over 75% of the assets are located within one mile of their respective campuses. More acquisitions can be expected, the JV says.