Scape in box seat to buy $600m student accommodation portfolio

Scape Student Living in Sydney.
Scape Student Living in Sydney.

Student accommodation group Scape has emerged in the box seat to pick up the Atira portfolio being sold by funds manager Blue Sky and investment bank Goldman Sachs as it draws on its operational edge against financial rivals for the $600 million portfolio.

The deal, while yet to be finalised, is likely to result in Scape taking on the management of Atira facilities, rebranding them and overhauling some complexes to bring them up to its own standards.

Scape in recent years has emerged as one of the leaders in the specialist sector, winning billions of dollars of backing for its business that spans both property development and management, as well as the soft skills to drive premium returns from student accommodation.

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Scape was this month raising for a $1 billion core fund in order to invest into a growing portfolio of facilities along the eastern seaboard.

The Australian Student Accommodation Fund is designed to hold up to $4 billion worth of purpose-built assets across major cities and already has received substantial commitments.

Scape already runs two development funds that have raised about $1.15 billion in the past four years and much of this has been deployed. The company has 18 buildings either completed or under way that have about 11,000 beds and they have an end value of about $4 billion.

Scape has won major pension backers in Dutch groups Bouwinvest and APG, insurer Allianz, German investor WPI, and the property arm of China’s ICBC International Holdings.

The group’s focus on top-class, purpose-built student accommodation also puts it in a strong position as the contest for the $2bn-plus Urbanest portfolio comes to a head.

Scape is also reportedly a contender in that race, which has drawn heavyweight international and local groups, notably US player Greystar and also Macquarie Capital.

The Atira portfolio is in need of an overhaul after Blue Sky and Goldman Sachs put it on the block last year. The owners have each wanted to exit and came close to selling to Canadian group Brookfield last year.

The latest deal is being brokered by real estate agent JLL and Goldman Sachs, but they did not comment.

Scape will be likely to invest in the portfolio and lift the standard of properties. Some players said that some buildings required work to make them more attractive to students.

Atira is positioned as one of the top purpose-built student accommodation platforms in Australia and New Zealand, with an objective to grow to more than 10,000 beds from its existing portfolio of more than 3500 beds across Australia. Six sites are complete and operational and there are three development sites.

Blue Sky last year warned of some delays, but is expanding in Sydney and New Zealand.

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