Campus Living Villages student accommodation transaction amidst global pandemic
JLL transacted Campus Living Villages’ portfolio of assets for the remaining 19.8-year term of the concession with University of Canterbury to Cedar Pacific.
University of Canterbury
1,551 beds for accommodation
A rare opportunity arose to sell a portfolio of three core, on-campus student accommodation assets, owned by Campus Living Villages (CLV) located at the University of Canterbury (UC). The opportunity comprised a 100 percent acquisition of the remaining term of the lease (19.8 years) on the student accommodation to the successful investor.
The dedicated specialist team of JLL brokers comprising Alternative Investments AUNZ and Capital Markets New Zealand ran an international expressions of interest campaign and needed to manage shifting alert levels amidst a global pandemic, with restricted international borders adding complexity to the situation. Interested overseas parties would need to travel to Christchurch to view the assets on-site, so close monitoring of the borders was required. Further challenges around international student movement due to border closures added additional complexities however the strength of the domestic student market, professional management by CLV and strong reputation of the University of Canterbury all generated significant interest from global investors.
JLL and CLV have a long-term global relationship across America, Australia, and the United Kingdom. In December 2020, a strategic review of CLV’s portfolio led to the engagement with JLL’s dedicated capital markets team comprising sector specialists and local brokerage experts. Together, they worked as exclusive advisors to manage CLV’s sale process from the early stages through to finalisation.
The portfolio comprised three established assets, totalling 1,551 beds, with differentiated product offerings for first and second year, postgraduate, and international student markets.
The three assets provided unmatched on-campus locations at UC with a captive student market and limited off-campus PBSA competition. UC maintained a Portfolio Weighted Average Occupancy of 95% over eight years to 2021, supported by obligations to market the portfolio and direct students to the dedicated accommodation assets.
JLL Australia and New Zealand collaborated to assemble a best-in-class team of sector and local experts to successfully reach a mutually beneficial outcome for all parties involved. In September 2021, Cedar Pacific, one of the leading investors in purpose-built student accommodation (PBSA) across Australia and New Zealand, entered into a purchase agreement to acquire the assets from CLV and continue to grow their strong presence in the New Zealand student accommodation market. The acquisition proved a strategic growth initiative for Cedar Pacific, expanding into the Christchurch market to complement their existing exposure in Auckland.
The transaction between Cedar Pacific and CLV highlights the value offered in the PBSA sector. Global capital new to the student housing sector is becoming more present in bidding processes. Student housing is renowned for low vacancies, and is deemed to generate long-term, predictable income returns. Even in the face of a pandemic, on-campus student accommodation assets largely remained resilient and continue to show strong growth prospects as the education sector grows.
JLL first established a dedicated PBSA team in 2011 and has grown to become one of the most active leaders in this space. Since 2019, JLL’s dedicated sector specialists across Australia and New Zealand has advised on over $4 billion of PBSA transactions.
Non-traditional forms of real estate assets—from retirement villages and data centres to car parks and build-to-rent homes—are becoming increasingly popular.
University of Canterbury student accommodation