Ivanhoé, Greystar, Bouwinvest Form $1.1B Venture

Image courtesy of Alexander Kagan via Unsplash

Greystar Real Estate Partners, Ivanhoé Cambridge Holdings UK Ltd. and Bouwinvest Real Estate Investors launched a joint venture to develop and acquire housing for students and young professionals in the greater Paris region with an investment capacity of €1 billion, or more than $1.1 billion.

The joint venture comes nearly two years after Greystar created a platform in France to acquire and develop purpose-built student and rental housing. The company also opened an office at that time and tapped Hideki Kurata, managing director – France, to lead it. The France office was considered a key part of the firm’s expansion as a provider and operator of rental multifamily housing in major European cities.

Greystar will be the operations manager for the venture. The new platform will be governed through a board with Ivanhoé Cambridge as the majority stockholder along with Greystar and Bouwinvest.

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The goal is to deploy funds to target new acquisitions, including ground-up developments, and projects already under construction. Although the partnership did not identify projects or locations, the venture has identified what it called “a significant pipeline of opportunities” in the Paris region and is targeting a number of acquisitions over the coming months. The focus will be on locations near public transportation in areas with stable employment and long-term rental housing demand, a strategy that has worked for the shareholders in other European cities such as London, Berlin, Amsterdam and Vienna. The properties to be built or acquired will be best-in-class and offer excellent amenities and services aimed at students and young professionals.

Responding to lack of supply

Paris has a high number of world-class education institutions, job prospects and a cultural scene that attracts domestic and overseas students. However, the French capital does not have a supply of high-quality accommodations to meet the demand, according to Kurata.

Robert Koot, director of European investments for Bouwinvest, said in prepared remarks that the demand for high quality and affordable housing for student populations is very strong. Bouwinvest has previously invested in the sector in the Netherlands and Australia and is now broadening its exposure and diversifying its allocation in the market by investing in France alongside Ivanhoé Cambridge and Greystar.

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Ivanhoé Cambridge and Bouwinvest have worked together before, most recently in April when they teamed with LOGOS and a Gulf Cooperation Council-based investor on a Chinese-based logistics fund with $800 million investment capacity. That venture will focus on developing logistics and industrial facilities in core locations serving Greater Beijing, Shanghai and Guangzhou and markets in China’s Midwest region.

Greystar and Bouwinvest have also teamed up in the past. In February 2019, the two firms partnered with APG Asset Management and Macquarie on a fund with $450 million in equity commitments that is investing in high-quality rental housing assets in top-tier Chinese markets, including Shanghai. The fund is within Greystar Asia-Pac, the rental housing platform established by Greystar and MIRA Real Estate, which is part of Macquarie.

Karim Habra, head of Europe & Asia-Pacific at Ivanhoé Cambridge, also referred to the joint venture members’ past experiences in working together. Habra noted the greater Paris and co-living markets are both major growth areas for the firm’s European strategy. In prepared remarks, he pointed to the COVID-19 crisis and stated it was accelerating trends toward an “alternative housing market” with more “premium flexible products and services in key locations.”