Mapletree Investments to evaluate options to monetise student housing assets

MAPLETREE Investments will evaluate various options to monetise its portfolio of student accommodation assets over the next few months. These options include a public Reit or private fund, it said.

This comes after it acquired four purpose-built student accommodation (PBSA) assets in the United Kingdom from Vita Group for over £165 million (about S$306 million), further expanding its student housing footprint in the UK.

The four assets total 917 beds in all - a 156-bed asset in Exeter, a 132-bed asset in Bristol, a 308-bed asset in Leeds as well as a 321-bed asset in Nottingham. They are strategically located within walking distance to Russell Group Universities as well as in close proximity to amenities such as town centres and train stations, Mapletree highlighted in a release on Monday. Vita will be tapped as the operator for the four assets.

Chua Tiow Chye, Mapletree’s deputy group chief executive officer, said: “This acquisition of four high-quality assets will enhance the scale and reach of our PBSA presence in the UK. This also underscores our commitment to grow the student accommodation sector as a stable and resilient asset class, with growth anchored by strong underlying and positive demographic and student enrolment trends.”

With this, Mapletree’s student accommodation portfolio will total 55 assets worth about S$4 billion, with over 23,000 beds across 37 cities in the UK, the United States and Canada. About 60 per cent of these beds are held by Mapletree’s private fund, Mapletree Global Student Accommodation Private Trust.

In response to queries from The Business Times on whether Temasek-backed Mapletree would consider spinning off its PBSA assets into a Reit, Mr Chua said: “As part of our business model, we will be evaluating over the next few months the various options of monetisation, which include syndicating the assets we have acquired into a public Reit or a private fund.”

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Mr Chua also said that the PBSA markets in the UK and US are showing strong signs of recovery as schools re-open for the new academic year, while the high vaccination rates have resulted in robust pre-leasing rates of student beds for the next academic year.

Centurion Corp and Singapore Press Holdings (SPH) - which owns The Business Times - are also seeing demand picking up for their accomodation assets.

“We are seeing an increase in demand from students, mainly in the United Kingdom, United States and Korea,” said Centurion Corp’s chief executive officer Kong Chee Min. Centurion has 19 operating PBSA assets with nearly 6,100 beds in the UK (2,815 beds), US (2,145 beds), Australia (896 beds) and Korea (208 beds).

Centurion had pre-sold over half of its bed capacity as at end June in the UK for the upcoming Academic Year (AY) 2021/2022, and pre-bookings have increased further since then. Mr Kong added: “We’re seeing clear signs of a recovery emerging in the UK, and continued growth in occupancy in the US.”

With the re-opening of travel in the UK, there has been increased enquiries for bookings from international as well as domestic students.

On the other hand, Centurion’s US portfolio - which managed to chalk up higher occupancy last year - was not impacted by the pandemic in 2020 as international students account for less than 2 per cent of its US portfolio occupancy.

For SPH, AY 21/22 bookings have surpassed AY 20/21 sales, and had achieved about 74 per cent of target revenue (at at July 16). A spokesperson for SPH said: "We are on track to achieve a portfolio occupancy of over 90 per cent." Aside from the re-opening of borders in the UK, another factor underpinning the recovery is an increase in the number of students enrolling into universities.

SPH's PBSA portfolio consists of 28 assets in the UK and Germany, valued at over S$1.4 billion, with a total of 7,723 beds. 

Shares in Centurion closed at 33.5 Singapore cents on Monday, down half a cent or about 1.5 per cent, while shares in SPH closed at S$1.94, unchanged.