AXA, Allianz JV buys Australia’s largest purpose-built student housing portfolio

A joint venture backed by Allianz Real Estate, AXA Investment Managers – Real Assets, APG and Scape Australia has agreed to buy Urbanest, the owner of Australia’s largest purpose-built student accommodation portfolio.

Urbanest Darling House, Sydney
Urbanest Darling House, Sydney

The portfolio has 6,805 beds across 14 operational assets located in Sydney, Melbourne, Brisbane and Adelaide, and will be operated by student housing specialist Scape, AXA announced.

The deal grows the JV’s student housing portfolio to 10,315 beds after its acquisition of a 3,510-bed portfolio from Atira Student Living in September this year.

“We have been attracted to the Australian student housing sector for some time, which is set to continue to benefit from Australia’s position as a leading destination for international students,” said Kumar Kalyanakumar, head of Australia at AXA IM – Real Assets.

“Further, its liveable cities and close economic and social ties with Asia will ensure it continues to benefit from this growing market.

“The sector has favourable demand drivers and growing institutional appeal, assets are tightly held and the barriers to entry are relatively high, particularly in Sydney, which makes this opportunity even more appealing.”

Australia is the third most popular country for overseas students behind the US and the UK, and is home to eight universities in the top 125 QS 2019 World University rankings.

AXA said there was a relatively low provision of beds in the Australian market compared to more mature international markets, providing a platform for significant future growth.

The Urbanest portfolio ranges from premium studios to affordably-priced twin share rooms and apartments, as well as a wide range of on-site services and amenities.

The property arms of European insurance giants AXA and Allianz formed the A$1.5bn core student housing JV with Scape in September this year, while Dutch investment manager APG joined more recently.

AXA IM – Real Assets now manages a €2.8bn student housing portfolio of over 25,000 student beds across six countries.

AXA IM -Real Assets has €87bn in assets under management.

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