Scape takes lead as Australia’s number one for student digs

Atira student accommodation at Toowong in Brisbane. Picture: Liam Kidston

Student accommodation provider Scape has taken the mantle as the country’s top student accommodation provider by picking up the Atira platform in a near $700 million deal, with the backing of powerful duo Allianz Real Estate and AXA Investment Managers-Real Assets.

The groups are backing the specialist property company to buy the Atira student housing business from the collapsed Blue Sky empire and investment bank Goldman Sachs.

The move, flagged by The Australian, puts Scape ahead of its rivals due to the scale it will have and the ability to boost the performance of the new facilities.

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The deal also signals AXA’s determination to expand in the social infrastructure space. The group has been aggressively pushing into alternative assets and this week also emerged as the backer of a $500 million medical property fund, alongside the Grosvenor Group and with Centuria Heathley as asset manager.

Scape struck a binding deal to acquire the Atira Student Living platform of purpose-built student accommodation assets for close to $700 million via the two vehicles it manages. Scape tapped its newly formed Australian Student Accommodation program and the Scape Australia development JV2 to help acquire the portfolio.

The Scape core program, backed by Allianz Real Estate and AXA Group for a total equity capacity of $1.5 billion, will acquire the six stabilised Atira student accommodation buildings located in Melbourne, Brisbane and Adelaide with 3510 beds.

The Scape JV2 will acquire the three Atira development assets located in Sydney, Melbourne and Perth, with capacity for the creation of about 1500 student accommodation beds. The deal was brokered by Jones Lang LaSalle and Goldman Sachs.

Scape Student Living Swanston St

An artist’s impression of the new Scape Student Living building at 393 Swanston St.

“We are confident that the combination of our businesses and our people will create the leading provider in the Australian market and deliver the scale required to offer our students, universities and the education accommodation sector the most innovative student living solutions,” said Scape Australia co-founder and executive chairman Craig Carracher.

Scape co-founder and chief executive Stephen Gaitanos says the group has been attracted to Atira’s quality student assets and the Atira management and operational teams, which he says are complementary to Scape’s existing platform and ambitions.

“We believe the combined platform will create the undisputed leader in the Australian PBSA sector,” he says.

In 2016 Scape sold The Pad Student Living to Goldman Sachs and Blue Sky, who rebranded it to Atira in 2017. “It is great to get our hands back on what is truly an excellent platform,” he says.

The director of Scape’s core program Geoff Lovell says the six stabilised Atira assets are the initial investment of Scape’s core program. The core program will soon acquire four completed assets that have been developed in Scape’s first local development venture; Scape Swanston in Melbourne, Scape Abercrombie in Sydney, and Scape Southbank and Scape Toowong, both in Brisbane.

AXA IM-Real Assets head of Australia Kumar Kalyanakumar said: “We have a high conviction on alternate real estate given the attractiveness of the relative returns from these sectors and the underlying fundamental growth drivers. We are attracted to the Australian student housing sector in particular, which is set to continue to benefit from Australia’s position as a leading destination for international students.”

Scape was advised on the Atira transaction by Moelis, Morgan Stanley, Herbert Smith Freehills, Greenwoods Herbert Smith Freehills and Colliers International.

Scape’s partnership with Allianz Real Estate and AXA Group will be its first closed-end core program targeting the purpose-built student accommodation market in Australia.

This article originally appeared on www.theaustralian.com.au/property.