Singaporean sovereign wealth group GIC and Dutch pension fund supervisor APG will take a majority stake in The Student Hotel in a deal that values the European scholar lodging and lodge group at €2.1bn.
APG and TSH’s founder Charlie MacGregor will improve their stakes within the group, whereas GIC might be a brand new investor. Aermont, the European asset supervisor that has part-owned the enterprise since 2014, has offered out as a part of the deal.
MacGregor opened the primary Student Hotel in 2012, and has grown the enterprise to 25 websites throughout eight international locations. APG and GIC have dedicated to take a position additional in an growth to different European cities, with plans to take the portfolio to 50 inns together with one in London and one other in Scotland.
“I’ve been in this industry for 17 years and I feel like I’m just getting started,” stated MacGregor, including that the backing of “two of the strongest investors in the world” would assist “take the company to the next level”.
Student lodging has develop into an space of specific investor curiosity given the chance for a extra steady earnings than a typical lodge enterprise, particularly during times of financial turmoil.
Singapore’s GIC is already one of the energetic buyers in scholar housing in Europe. Last month, GIC and Greystar Real Estate Partners acquired Student Roost, a UK scholar housing supplier from Brookfield for £3.3bn. The portfolio spans greater than 50 properties with over 23,000 beds throughout UK college cities.
While inventory markets globally have been battered by the pandemic, and extra not too long ago by Russia’s invasion of Ukraine, property values in sectors reminiscent of rental housing and warehouses have held up comparatively effectively.
TSH is headquartered in Amsterdam and employs 650 folks. It has greater than 10,000 rooms open or underneath growth.
During the pandemic, TSH elevated room allocation in the direction of college students when leisure and company journey was considerably lowered, which helped help occupancy charges and remaining money flows.
“We outperformed the hospitality sector hands down [during the pandemic] because our hotels were open and we were full,” stated MacGregor.
He added that the pandemic had proved the enterprise mannequin was “stable and resilient”. “From an investment point of view it’s very stable on the downside, but it’s also able to take the upside when markets return,” MacGregor defined.
TSH stated scholar bookings for the 2022-23 tutorial 12 months stood at report ranges. The inns additionally provide co-working area for firms.
MacGregor stated the brand new funds can be used to increase TSH to extra cities throughout Europe. There are at the moment 15 absolutely operational websites with 10 extra underneath growth. New inns are set to open in Madrid, Barcelona and Toulouse later this 12 months.
MacGregor added that he hoped to grasp the growth to 50 websites throughout the subsequent seven years.
Lee Kok Sun, chief funding officer of actual property at GIC, stated the belongings have been “well-located, enjoy good connectivity to city centres and transportation networks, and are in proximity to universities and other amenities. We are confident that this investment will generate resilient long-term returns.”
Additional reporting by George Hammond