Australia: Scape, the largest owner and operator of student housing in Australia, has closed on A$3 billion in fresh debt financing.
Part of the offering was nearly three times oversubscribed. The largest element of the two-part offering involved Sydney-based Scape securing A$1.5 billion of debt from 18 banks to refinance assets under its Scape Core Program flagship fund, which owns a A$4 billion portfolio of student accommodation assets. The group of lenders offered total commitments of A$4.2 billion, oversubscribing the offering by 2.8 times, according to company representatives.
The student housing provider also secured an additional facility of around A$1 billion to fund the Core Program’s planned acquisition of six completed assets from the company’s development joint ventures. In addition to those tranches, Scape raised an A$570 million facility to refinance debt under one of its development joint ventures.
Scape CFO Tim Peel said: “The pricing (of the previous Scape Core Program facility) reflected a business that was still recovering from Covid. In the time since then, we’ve really gone from strength to strength. In particular, the occupancy in our buildings has been very strong, and we’ve experienced high rental growth…the metrics of our fund have improved substantially, so we thought it would be a good time to refinance the debt and capitalise on banks’ appetite to lend to new asset classes that they have some faith in.”
The A$1.5 billion tranche enables Scape’s Core Program to lower its cost of borrowing by over 50 basis points, which works out to roughly A$8 million in annual interest expense savings. The refinancing also extended the maturity of the debt, which was originally due in 15 months, to three to five years.
The transaction comprised a A$800 million syndicated facility, with the remainder coming from nine bilateral facilities. The lender roster includes CBA, ANZ, Westpac, Macquarie, SMBC, Bank of China, DBS, UOB, OCBC, Credit Agricole and ING.
Scape’s Core Program holds 27 assets totalling 13,000 beds across Sydney, Melbourne, Brisbane and Adelaide, and includes APG Asset Management, Bouwinvest, Pimco Prime Real Estate, AXA and Ivanhoe Cambridge among its investors.
Investors in the second development JV include Pimco Prime, the Oman Investment Authority, Bouwinvest, German pension fund WPV, and Scape’s founders.
“In total, A$5.3 billion of funding commitments have been offered over the past few months,” the company said. “This demonstrates the incredibly strong lender support in the market for the Scape PBSA model. It cements Scape’s position as the largest and most dominant player in the living sector and reflects the growing acceptance among banks of PBSA as a mainstream asset class.”
