GIC, APG to take substantial stake in The Student Hotel from Aermont Capital

SINGAPORE state investor GIC and Dutch pension fund APG will acquire a substantial stake in hybrid hospitality brand The Student Hotel (TSH) from asset-management business Aermont Capita, in a move that will value the European student accommodation and hotel group at €2.1 billion (S$3.1 billion). 

In a joint statement on Tuesday (Jun 21), the parties said that under the deal, APG and TSH’s founder Charlie MacGregor will raise their current stakes in the group. This is GIC’s first investment in TSH. The transaction is, however, subject to approval from the relevant regulatory authorities.

MacGregor and Aermont Capital entered into business in 2014 after MacGregor opened the first The Student Hotel in 2012. APG first invested in TSH in 2015.

With APG and GIC’s latest commitments, TSH will be able to accelerate its growth strategy to expand into key European cities, and grow its presence to 50 hotels from the current 25 now under ownership.  Its hybrid-hospitality model combines student accommodation, hotel rooms, co-working and meeting spaces, bars and restaurants. 

Lee Kok Sun, chief investment officer for real estate at GIC, said: “We are pleased to invest in The Student Hotel as its assets are well-located, enjoy good connectivity to city centres and transportation networks, and are near universities and other amenities. We are confident that this investment will generate resilient long-term returns.”

Tracy Stroh, regional head for European real estate at GIC, said TSH’s hybrid hospitality model is “unique” in that its purpose-built student accommodation appeals to the student demographic, yet still caters to both business and leisure users. “This flexibility enables TSH to capture opportunities as demand patterns fluctuate throughout the year,” she said.

During the Covid-19 pandemic, this hybrid model proved resilient in that TSH was able to substantially increase room allocation for students when leisure and corporate travel fell dramatically, thereby achieving strong occupancy rates and remaining cash-positive.

TSH’s student bookings for the 2022/23 academic year already stand at “record levels”, said the statement.

To better address guests’ needs and increase flexibility across its offering, TSH is also investing in technology to implement the first space or time booking platform across its hotels. This will enable guests to book any space in TSH buildings for a defined period of time – from meeting rooms and co-working desks to gym and pool access and ping pong tables.

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TSH chief executive Macgregor said: “We are very excited to welcome GIC on board, and together with APG, we look forward to bringing The Student Hotel experience to more cities across Europe. We have bold plans, and the additional committed capital will allow us to be even more ambitious.”