Allianz Real Estate, a real estate investment and asset manager, is acquiring a stake in London-based Chapter, a student accommodation brand. No financial terms were disclosed. Chapter is backed by Greystar Real Estate Partners and the Public Sector Pension Investment Board. Eastdil Secured LLC and Jones Day advised Greystar and PSP Investments on the transaction with Linklaters LLP providing legal advice for PSP Investments. Savills and Herbert Smith Freehills advised Allianz.
LONDON–(BUSINESS WIRE)–Greystar Real Estate Partners (“Greystar”), a global rental housing leader, the Public Sector Pension Investment Board (“PSP Investments”), one of Canada’s largest pension investment managers, and Allianz Real Estate (“Allianz”), the global real estate investment and asset manager, today announced a joint venture to grow Chapter, London’s leading student accommodation brand.
Allianz is acquiring an interest in Chapter alongside PSP Investments and Greystar’s current stake. This new partnership supports an expansion program targeting 10,000 student beds and doubling the size of the portfolio within five years. The partnership’s strategy is to continue to grow the portfolio through acquisitions and new developments in addition to continuing to improve the existing assets and Chapter brand.
Greystar is the global leader in the operations, investment and development of rental housing with over 435,000 units under management globally. It will continue to manage this portfolio, which currently comprises 5,100 student beds in ten central London locations, including Aldgate, Islington, King’s Cross, South Bank and Spitalfields. Chapter White City in west London and Chapter Highbury II in north London, the two newest additions to the Chapter portfolio, will launch in September 2018.
“This partnership marks an important step in the rapidly growing institutional-grade rental housing and student accommodation investment market in the UK,” said Bob Faith, Founder and CEO of Greystar. “We are excited to partner with PSP and Allianz on this exciting endeavor. We have a hugely ambitious target to scale the business to secure major operational efficiencies. This joint venture means we’re now in a strong position with tremendous financial resources to realize Chapter’s potential.”
“London’s housing market is under enormous pressure and student accommodation in prime locations is highly constrained,” added Faith. “London is a global leader in higher education attracting students from around the world and Chapter is well positioned to provide quality housing in prime locations. We have built Chapter into a strong brand, which students and parents from around the world trust to provide a safe and secure home while they are pursuing their studies.”
“We are very excited to welcome Allianz, an internationally renowned and respected real estate investor, into our established and successful partnership with Greystar,” added Stéphane Jalbert, Managing Director (Europe and Asia Pacific), Real Estate, PSP Investments. “Chapter is now a recognized, income-generating business and this new partnership will strengthen and grow this highly efficient purpose-built student accommodation platform.
“Allianz and Greystar share our long-term view and focus on high-quality assets in central London with a steady income stream. Teaming up will facilitate a period of expansion for Chapter in London.”
“This joint venture with Greystar and PSP Investments underlines our strategic commitment to scale up our global allocation to high-quality student accommodation in established markets”, said Olivier Téran, CIO of Allianz Real Estate. “We look forward to playing a key role in supporting the partnership’s ambitious expansion plans and to making additional investments in the sector across the board.
“This transaction is particularly important for Allianz as it also marks our largest equity investment into the UK, which has become an increasing focus for us across the capital structure. We will continue to explore opportunities to increase our footprint in the UK as part of our global diversification strategy.”
London rated world’s best city for university students
London was recently rated as the best city in the world for university students by QS, a leading global higher education company which publishes the annual World University Rankings. The ratings are based on factors such as the number of top universities in a city, local job market, diversity and quality of life.
London is an attractive destination for international students, with an estimated one in four students coming from outside of the UK. London is also popular with British students and these strong international and domestic markets have created a shortage of purpose-built student accommodation in the city. London is experiencing a housing shortage and demand for student accommodation currently exceeds supply by a ratio of approximately two to one.
Greystar and PSP Investments were advised by Eastdil Secured, LLC and Jones Day. Legal advisor for PSP Investments was Linklaters LLP. Allianz was advised by Savills and Herbert Smith Freehills.
Transaction is subject to customary regulatory approvals.
Greystar is a leading, fully integrated real estate company offering expertise in investment management, development and property management of rental housing properties globally. Headquartered in Charleston, South Carolina with offices throughout the United States, Europe, Latin America and Asia-Pacific, Greystar is the largest operator of apartments in the United States, managing over 435,000 units in over 150 markets globally, with an aggregate estimated value of approximately $80 billion. Greystar also has a robust institutional investment management platform dedicated to managing capital on behalf of a global network of institutional investors with over $26 billion in gross assets under management including more than $9.7 billion of developments that have been completed or are underway. Greystar was founded by Bob Faith in 1993 with the intent to become a provider of world class service in the rental housing real estate business. Since entering the UK market in 2013, Greystar has built up a property portfolio worth £4.5 billion, representing over 32,000 units and comprising both student housing and multifamily rental accommodation. The company is an investor and operator of student brand Chapter and a shareholder in student accommodation provider iQ. To learn more about Greystar, visit Greystar.com
ABOUT PSP INVESTMENTS
The Public Sector Pension Investment Board (PSP Investments) is one of Canada’s largest pension investment managers with CAD$153 billion of net assets as of March 31, 2018. It manages a diversified global portfolio composed of investments in public financial markets, private equity, real estate, infrastructure, natural resources and private debt. Established in 1999, PSP Investments manages net contributions to the pension funds of the federal Public Service, the Canadian Forces, the Royal Canadian Mounted Police and the Reserve Force. Headquartered in Ottawa, PSP Investments has its principal business office in Montréal and offices in New York and London. For more information, visit investpsp.com or follow us on Twitter and LinkedIn.
ABOUT ALLIANZ GROUP
The Allianz Group is one of the world’s leading insurers and asset managers with more than 86 million retail and corporate customers. Allianz customers benefit from a broad range of personal and corporate insurance services, ranging from property, life and health insurance to assistance services to credit insurance and global business insurance. Allianz is one of the world’s largest investors, managing over 650 billion euros on behalf of its insurance customers while our asset managers Allianz Global Investors and PIMCO manage an additional 1.3 trillion euros of third-party assets. Thanks to our systematic integration of ecological and social criteria in our business processes and investment decisions, we hold a leading position in the Dow Jones Sustainability Index. In 2016, over 140,000 employees in more than 70 countries achieved total revenue of 122 billion euros and an operating profit of 11 billion euros for the group.
ABOUT ALLIANZ REAL ESTATE
Allianz Real Estate is the strategic real estate organization within the Allianz Group and a leading international real estate investment and asset manager. Allianz Real Estate develops and executes worldwide tailored portfolio and investment strategies on behalf of the Allianz companies, considering direct as well as indirect investments and real estate loans. The operational management of investments and assets is currently performed in 5 regions, West Europe (Belgium, France, Italy, Luxemburg, Portugal, Spain), North & Central Europe (Austria, CEE, Germany, Ireland, Nordics), Switzerland, USA and Asia Pacific. The headquarters of Allianz Real Estate are located in Munich and Paris. Allianz Real Estate has approximately 56 billion euros assets under management.
Chapter is a market leading student accommodation brand, providing premium student living in the best London locations. Chapter has 5,100 student beds in ten communities located in London fare zones 1 or 2, near top universities and excellent transport links. Chapter attracts a vibrant resident mix with both domestic and international students from over 105 countries. Chapter provides a totally unique living experience for students from across the globe. With its exclusive membership system, students who live with us have access to all amenities and events across our London residences, enabling them to build a city-wide community of friends whilst enjoying some of the most extraordinary living spaces in the London student market. Greystar is a leading, fully integrated US real estate firm and one that thousands of families from around the world trust to provide their children with a home away from home while completing their studies. With over 18 years’ experience in the student accommodation sector, Greystar has a long-standing reputation for world-class customer service and exceptional quality accommodation.