Blue Sky Private Real Estate (a subsidiary of ASX listed Blue Sky Alternative Investments Limited) has formed a $1 billion student accommodation joint venture with leading global investment firm Goldman Sachs.
The parties aim to build a portfolio of 5,000 to 10,000 purpose built student accommodation beds across Australia and New Zealand over the next few years, in a sector which has been heavily undersupplied relative to other global student markets including the US and UK.
Blue Sky’s investment strategy was formulated by senior real estate executives Adam Vaggelas and Nick Singleton in 2014.
The fund managers and their team have since grown the student accommodation development pipeline to more than 3,000 beds across the country.
Head of Blue Sky Private Real Estate, Adam Vaggelas said the Goldman Sachs partnership was a key milestone in the company’s strategy to build out a platform of quality, well located and affordable student accommodation assets in a heavily undersupplied market.
“Education is Australia’s largest non-resource export industry, worth in excess of $18 billion per annum and growing. The ability to scale further into this domestic thematic, in part due to the region’s proximity to a rapidly expanding Asian middle class, is a key focus for the partnership,” Mr Vaggelas said.
The emerging domestic asset class is seen as a highly resilient, asset backed investment, which has witnessed strong investor appetite over the past few years in more mature global markets.
The Blue Sky partnership is Goldman Sachs’ entry into the Australian student market, however the global investment firm has been active in the European student market for a number of years.
Earlier this year Goldman Sachs announced a £2 billion joint venture to form the Vero Group consisting of approximately 600 staff managing almost 25,000 student beds across the UK. Entities owned by Goldman Sachs and funds managed by Blue Sky will each own 50 per cent of future projects developed under the Australian joint venture.