Allianz Real Estate, the global real estate investment manager of Allianz Group, has partnered with Greystar Real Estate Partners (“Greystar”), the global rental housing leader and the Public Sector Pension Investment Board (“PSP Investments”), one of Canada’s largest pension investment managers in a joint venture to grow Chapter, London’s premier student accommodation brand.
The equity investment volume of the transaction that Allianz Real Estate is executing on behalf of various Allianz insurance companies, stands at around GBP350m.
Allianz is acquiring an interest in Chapter alongside PSP Investments and Greystar’s current stake. This partnership supports an expansion programme that will double the size of the portfolio to 10,000 student beds within five years. The partnership’s strategy is to continue to improve the operational quality of the assets and build the Chapter brand.
Greystar will continue to manage this portfolio, which currently comprises 5,100 student beds in 10 central London locations, including Aldgate, Islington, King’s Cross, South Bank and Spitalfields. Chapter White City in west London, the newest addition to the Chapter portfolio, will launch in September 2018.
“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.”
The joint venture marks a milestone in a series of transactions to build Allianz’s UK footprint. Recently, the lending business of Allianz Real Estate has significantly increased its exposure through several transactions, including construction finance for 80 Fenchurch Street in April 2018, provisioning of long term debt worth GBP212 million to refinance 55 Baker Street, London in September 2017 and co-financing the iconic CityPoint Tower earlier in the year. On the equity side, building on an existing exposure to the student housing sector in the UK via Unite’s USAF since 2015, Germany and the US, Allianz announced in April 2018 its partnership with Scape Australia to establish “Scape Australia JV 2”, an AUD-denominated, closed-ended fund targeting the purpose-built student accommodation market in Australia.
In this transaction, Allianz was advised by Savills and Herbert Smith Freehills.
The transaction is subject to customary regulatory approvals.