Foreign Investors Turn To Student Housing Projects For Safety
As the bull market reaches its eighth year, foreign investors are shifting their focus from trophy assets to safer bets like student housing.
The student housing sector has been deemed "recession-proof" for its ability to weather the storm that a financial crisis can bring. While enrollment in colleges has been on the decline since 2010, enrollment in public universities has increased — particularly in the case of Tier 1 postsecondary schools with STEM programs. Residences near these universities have also become sought-after assets, the Wall Street Journal reports.
Nearly half of the student housing transactions this year have been driven by foreign capital. This is up 6% from 36% in 2017 and 21% in 2016, according to the WSJ.
Last year, Scion Group, the Canada Pension Plan Investment Board and Singapore sovereign wealth fund GIC formed a joint venture to purchase three U.S. student housing portfolios for $1.6B. In January, the JV announced a $1B acquisition of another 22 student housing properties. Since its inception in 2016, the JV has purchased a total of $4B in student housing assets in 52 university markets.
Similarly, Mapletree Investments Pte, which is owned by Singapore-based Temasek Holdings, acquired an 850-bed student housing facility in University City, Philadelphia, for $197.5M.
