Evergreen, M3 Capital Partners’ principal investment vehicle, has sold its 6,875 bed Urbanest Australia Purpose Built Student Accommodation (PBSA) platform to global student housing operator, Scape. The sale, in excess of A$2 billion, is the largest ever student accommodation transaction in Australia and reflects a new low in terms of Net Initial Yields for the sector. 

The disposal includes 14 PBSA assets in Sydney, Melbourne, Adelaide and Brisbane, as well as market leading operational platform, Urbanest Australia. In addition, the University of Melbourne has purchased 527 beds from Evergreen that are currently under construction. Savills advised the vendor. 

Image: Swanston Street Urbanest reception. Source: Urbanest

Conal Newland, Head of Student Accommodation, Savills Australia comments “the successful completion of this historic transaction by Scape and its investment partners given the current pandemic conditions reinforces the strength of the long-term investment fundamentals underpinning the Australian PBSA sector.”

Newland went on to add “despite the current headwinds impacting Australian PBSA, there are some really strong positive signs for the sector looking towards the second half of 2020 and 2021.  For example, the federal government is looking to be proactive in continuing to attract foreign students with a recent announcement that chartered flights could be allowed to enter Australia to facilitate students returning to studies on-shore in Semester 2”

Joe Guilfoyle, Head of Corporate Finance, Savills Capital, says: “We are delighted to execute another landmark M&A deal for Evergreen on the disposal of its Australian student housing platform to Scape, demonstrating the continued interest of this asset class to institutional investors.”

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