Singaporean fund GIC strikes €2.1bn deal with The Student Hotel

Singaporean sovereign wealth group GIC and Dutch pension fund manager APG will take a majority stake in The Student Hotel in a deal that will value the European student accommodation and hotel group at €2.1bn.

APG and TSH’s founder Charlie MacGregor will increase their stakes in the group, while GIC will be a new investor. Aermont, the European asset manager that has part-owned the business since 2014, has sold out as part of the deal.

MacGregor opened the first Student Hotel in 2012, and has grown the business to 25 sites across eight countries. APG and GIC have committed to invest further in the expansion of the group to other European cities, with plans to take the portfolio to 50 hotels including one in London and another in Scotland.

Student accommodation has become an area of particular investor interest given the opportunity for a more stable income than a typical hotel business, especially during periods of economic turmoil.

Singapore’s GIC is already one of the most active investors in student housing in Europe. Last month, GIC and Greystar Real Estate Partners acquired Student Roost, a UK student housing provider from Brookfield for £3.3bn. The portfolio spans more than 50 properties with over 23,000 across key UK university cities.

TSH is headquartered in Amsterdam and employs 650 people. It has more than 10,000 rooms in Europe open or under development.

During the pandemic, TSH increased room allocation towards students when leisure and corporate travel was significantly reduced, which helped support occupancy rates and remaining cash flows. TSH said student bookings for the 2022-23 academic year stood at record levels. The hotels also offer co-working space for companies.

MacGregor said the new funds would be used to expand TSH to more cities across Europe.

Lee Kok Sun, chief investment officer of real estate at GIC, said the assets were “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.”