Canadian pension plan goes to school

In a deal valued well over a billion dollars one of Canada’s largest public pensions gets into student housing

Canada’s largest pension-fund manager made its first foray into U.S. student housing, forming a joint venture with the Scion Group LLC and Singapore’s GIC Pte. to purchase a group of properties for $1.4 billion.

Canada Pension Plan Investment Board and its partners acquired University House Communities Group Inc., through a subsidiary of the joint venture, from InvenTrust Properties Corp., according to a statement Monday. CPPIB and GIC will each own a 47.5 percent stake in the subsidiary, and Scion will own the remaining 5 percent and manage the properties.
The transaction is expected to close in the middle of the year, and the joint venture is seeking to acquire more student housing, according to the statement. CPPIB bought student housing in the U.K. last year.
“The UHC portfolio represents a valuable opportunity to enter the U.S. student housing sector with top-tier, well- located assets,” Peter Ballon, head of Americas real estate investments for the pension plan, said in the statement.

The fund manages C$273 billion ($196 billion), with C$34 billion of that in real estate. Scion is the largest closely held owner of student housing in major markets in the U.S., according to the statement. GIC is Singapore’s sovereign-wealth fund.

The UHC assets include 13,000 beds across 18 communities, and four that are in development. They’re located across the U.S., including near the University of Texas, Florida State University and California State University at Fullerton.

The transaction will enable InvenTrust to focus on becoming a purely retail real estate investment trust, the Oak Brook, Illinois-based company said in a separate statement.

Katia Dmitrieva
Bloomberg News