Keppel private fund acquires two education assets in Sydney for A$198 million

KEPPEL Education Asset Fund, a private fund owned by Keppel Corporation , is acquiring two properties in Australia, which it intends to lease out to educational institutions. 

The properties were acquired for A$198 million (S$175 million) and are expected to bring Keppel’s portfolio of assets in Australia to A$4.8 billion upon completion. 

Christina Tan, chief executive officer of fund management and chief investment officer of Keppel Corporation, said: “The demand for quality schools and campuses in the Asia-Pacific continues to be well-supported by macro trends, including rapid urbanisation, an expanding middle class and rising affluence, as well as a continued focus on high-quality education.

“The education market is a resilient one, with education assets offering stable returns and inflation-adjusted rentals.”

She noted that the two Australian assets come with long leases and established tenants, and offer investors attractive, risk-adjusted returns and yield-steady cashflows. She said: “With Keppel’s robust network on the ground, we have developed a strong deal flow pipeline of over US$2 billion in education assets, which we are currently exploring.”

One of the Australian assets is a purpose-built campus that is a 15-minutes drive from the Sydney central business district.

The property has a net lettable area of approximately 10,700 square metres (sq m) and is currently fully leased to the University of New South Wales on a long-term basis. The acquisition of the asset was completed in August.

The other Australian acquisition is a seven-storey commercial building in North Sydney, to be acquired under a forward-purchase agreement. 

Extensive asset enhancements will be carried out to the property to upgrade and convert it to a K12 independent school campus, which will yield a net lettable area of approximately 9,150 sq m. 

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Keppel Corporation said: “The property comes with pre-commitment from a leading global operator of premium schools for a long-term lease.”

The acquisition is expected to be completed, subject to the fulfilment of certain conditions, by Q1 2025. 

Shares of Keppel Corporation closed 1.5 per cent or S$0.10 higher at S$6.76.