UniLodge sale draws interest

The UniLodge South Bank student accommodation complex in Brisbane.

Investment bank UBS is understood to be testing interest with the Mirvac Group, GPT Group and Charter Hall over whether they would acquire the student accommodation platform UniLodge.

Cedar Pacific is selling what is the country’s largest student accommodation provider after it considered a purchase of the Campus Living student accommodation business this year.

Working on the sale is UBS, but it is understood interest has been tested with only a handful of parties.

As well as three of the ­Australian-listed REITs, Mapletree and Capitaland out of Singapore have also been approached about buying the business.

Brisbane-based Cedar Pacific invests in the living sector, including build-to-rent accom­modation, and is owned by John McCall MacBain’s Pamoja Capital.

It was the sole suitor for $2bn student accommodation provider Campus Living earlier this year that had been up for sale through Goldman Sachs.

Some estimate that UniLodge’s sale price would be $500m-$600m, because while it is the largest provider of student accommodation in Australia, it does not own the hard assets, only managing them for third parties.

It manages more than 100 furnished, self-catered accommodation buildings across Australia and New Zealand, which comprise over 36,000 beds.

The ownership structure would have some appeal to investors that favour investment without major demands for capital spending, rather just generating fee income.

Australian listed REITS such as GPT Group, Mirvac Group and Charter Hall are being targeted as real estate investors explore ways to capitalise on the country’s housing shortage and ride the wave of increasing prices for residential real estate.

Both Charter Hall and GPT have also looked at retirement living assets, while Mirvac has invested in land lease communities and the build-to-rent sector.

However most look to invest in alternative asset classes through third party capital investors such as superannuation funds like AustralianSuper.

IBISWorld says UniLodge has 26 per cent market share of the Australian Student Housing Management industry.