Bookmark & Share
Mapletree Investments Pte Ltd has successfully established the first trust in Singapore that focuses solely on student accommodation, according to an SGX filing on Tuesday, 21 March 2017.
Known as Mapletree Global Student Accommodation Private Trust (MGSA P-Trust), the entity holds about US$1.3 billion (S$1.82 billion) worth of properties in the US and the UK, the two largest student accommodation markets in the world.
Overall, it owns 35 assets with more than 14,000 beds across 22 cities. Of this, 10 properties with 8,363 beds are located near US universities, while 25 facilities with 5,910 beds are within proximity to tertiary schools in the UK.
Following the creation of MGSA P-Trust, Mapletree has raised US$291 million (S$407.02 million) by selling equity in the US portfolio and £195 million (S$339.9 million) in the UK portfolio. Major participating investors include The Great Eastern Life Assurance Company, as well as DBS Bank and UBS AG, both of which invested in the trust on behalf of their wealthy clients.
“The successful close of MGSA P-Trust is testament to investors’ confidence in Mapletree’s track record of delivering the desired returns levels,” said Mapletree’s Group CEO Hiew Yoon Khong.
“Opting for the private track also allowed us to bring the product to market quickly, and is more cost effective to set up and operate on an ongoing basis, without the lengthy process to launch an IPO and the increasing compliance costs to maintain a real estate investment trust (REIT).”
The trust is managed by Mapletree Real Estate Advisors Pte Ltd, a wholly-owned subsidiary of Mapletree. To strongly align investor-manager interests, Mapletree will retain a 35 percent stake in MGSA P-Trust, which has a term of five years, with provision for a one-year extension.
Furthermore, Hiew shared that student accommodation is an asset class that flourishes even during economic downturns as the pursuit of higher education continues to grow worldwide even during recessions.
“The US and the UK, homes to the largest number of top universities in the world, are key beneficiaries of this trend. Investors of MGSA P-Trust will therefore benefit from the robust and stable income of the assets, which will be distributed to them along similar principles as a Singapore-listed REIT.”
Related Articles:
Frasers Commercial Trust’s value estimate lowered on lease uncertainties
AA REIT to issue $50m of unsecured notes