College Housing Attracts
Interest from Singapore
by Christine Haughney
From The Wall Street Journal Online
June 02, 2006
Singapore's search for profitable real-estate investments throughout the world has led to the U.S. college-housing market.
The real-estate investment arm of the Singaporean government, GIC Real Estate Pte. Ltd., is pouring $300 million into a small Philadelphia-based college-housing developer, Campus Apartments Inc. In addition to providing a home for the capital that GIC is competing with other institutions to invest, the deal enables Campus Apartments to expand into other cities by buying and developing an additional $1 billion-plus in real estate.
David Adelman, Campus Apartments' president and chief executive, says he chose to partner with GIC over five other institutional investors because the government-controlled unit agreed to let the company hold on to its developments for 10 years rather than the three to five years that other institutional investors wanted. As a result, Campus Apartments has more time to get a return on their combined investments and make money from cash flow.
"Although they are this giant global institutional investor, they operated in a very entrepreneurial way," Mr. Adelman says. Last fall, the government invested $600 million in a Japanese property fund managed by Denver-based real-estate investment trust ProLogis.
GIC declined to comment on the Campus Apartments investment.
Campus Apartments owns $250 million in student apartments in Philadelphia, New Jersey, and Durham, N.C. More than a third of GIC's money will go for projects in Columbus, Ohio; Richmond, Va.; and Lancaster, Pa., Mr. Adelman says.
The GIC-Campus Apartments deal marks the third partnership Deutsche Bank AG has helped arrange this year in which institutions have partnered directly with local developers rather than through more sophisticated national real-estate firms. "This is an emerging trend where institutional capital is now comfortable with investing directly with property owners and operators rather than through real-estate managers," says Devin Murphy, global head of Deutsche Bank's real-estate investment banking division.
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