Scape closes GBP500m JV to bolster PBSA offering
Scape has closed a GBP500 million joint venture with APG (Algemene Pensioen Groep), one of the world’s largest pension investors.
The partnership will establish Scape as one of the world’s largest developers and operators of purpose-built student accommodation (PBSA), whilst also fueling the company’s expansion strategy into mainstream living as it takes its new Scape Living concept to a wider market.
The joint venture is seeded with c1,000 PBSA beds in London and the South-East, a cGBP250 million mixed use residential and PBSA led development scheme in Canada Water, and the first Scape Living building in Guildford, due to open in the first half of 2021.
As a global operator of PBSA that started in the UK in 2008, Scape now has properties located around the world in leading academic cities, providing an inspirational place for people to live. The success of the current Scape student offering has led to the demand for a similar high-quality city and community-based living proposition for city dwellers who are currently faced with the choice between location or quality of accommodation to live in prime city centre locations.
Scape Living will provide its residents with thoughtfully crafted; design led studio-apartments in the heart of the city. The Living concept will also feature shared spaces including a fitness studio, co-working zones and family style kitchens, not forgetting important essentials such as weekly cleans, superfast Wifi and 24/7 security all included within the monthly fee, making it hassle-free for residents. There will also be thoughtful little extras that make a space a home, including grocery deliveries, events, Sonos speakers and beautiful furnishings.
Nigel Taee, Scape Founder and Global Chairman, says: “Our student proposition is just the beginning for Scape. We have ambitious plans for the next few years as we develop the Scape offering and start to move into new territories.
Scape Student has gone from strength to strength over the last 12 years. We will continue to develop this both in the UK and globally whilst also extending our proposition to provide quality accommodation for city dwellers with Scape Living.”
Tom Ward, Scape Founder and Global CEO, adds: “This joint venture marks an exciting opportunity for Scape and its sustained growth. Throughout the Covid-19 pandemic we have been committed to focusing on global business expansion and ensuring long-term resilience. The PBSA sector has proven to be strong, despite the challenges of the last few months, with accommodation providers adapting to these new conditions and adjusting operations accordingly. The last year has also reinforced the importance of community and our Living proposition has been developed to meet the needs of city dwellers as they adapt to living in a world shaped by the impact of this pandemic.
"We’re delighted to be partnering with APG on the next stage of the roll-out of the UK business. Scape’s student proposition remains robust and we see significant potential in bringing our offering to a wider audience. This investment will help consolidate our position at the forefront of the PBSA market as well as enabling the extension into new sectors.”
Funds from the APG joint venture will also be used to support Scape’s expansion strategy within PBSA as it continues to develop its high-specification student accommodation assets across the UK’s leading higher education cities. In the UK and Ireland, the PBSA provider currently has a portfolio of properties across London and the South-East, with properties in Brighton (555 beds), Guildford (403 beds) and Dublin (298 beds) having opened their doors to students in September 2020. Funds from the partnership will support Scape’s strategy to develop a further 10,000 beds in the UK over the next five years, including a 788-bed development at London’s Canada Water.
The joint venture will see APG act as a partner and investor as the company continues its global expansion, making Scape one of the world’s largest developers and operators of PBSA. Currently its portfolio has over 30,000 beds in operation and development across the UK, Australia and the USA. With Scape’s ambitious strategy underway, the business is targeting growth in excess of GBP2 billion in the coming years.
The news comes following a strong year for the business as it completed a AUD2.2 billion acquisition of competitor Urbanest’s property portfolio in Australia. The company also secured a USD165 million loan from Madison Realty Capital in November 2020 to enable it to start work on its first Scape Living North American development located in Boston’s Fenway (451 beds). Scape is planning to launch 2,500 units in the US over the next three years as the company takes its new living proposition to the market.
Robert-Jan Foortse, Head of European Real Estate at APG Asset Management, says: “On behalf of our pension fund clients, we are pleased to announce the enhancement of our successful relationship with Scape that started for APG as founding investors of the Australian Scape venture. We look forward to building on this global partnership with Scape by supporting its UK expansion. It is our belief that the UK student and the UK housing market offer very compelling investment opportunities that provide our clients with long term stable returns. Both face long term favourable demand through continued trends such as increasing global international student mobility, growing domestic student population and growing household formation. The continued attraction of the UK education market and the limited space available in cities requires more flexible and high-quality accommodation with trusted brands such as Scape. We see a valuable opportunity with the business to expand Scape’s knowledge of high specification property to bringing quality living to more people in the UK through Scape Living.”