Hana Financial Investment Co. Ltd. and Chicago-based Scion Group have acquired a portfolio of four newly-developed student housing facilities for $325 million through a recently-formed joint venture.
For the transaction, Hana put around $110 million into the venture to buy 95% of the portfolio which currently yields about 8% per annum in terms of the US dollar, according to investment banking sources on Nov. 18.
It has completed the sell-down via a domestic vehicle with a seven-year term. The sources declined to give details on the domestic investors.
Scion, which focuses exclusively on the student housing sector, will operate the properties with a 5% ownership in the portfolio.
On Nov. 12, both companies announced the completion of the acquisition in a joint statement.
They raised the remainder of the acquisition cost through senior and mezzanine loans from local financial institutions and private equity funds, the sources said.
The residential facilities are located in University of Florida in Gainesville, Florida; Colorado State University in Fort Collins, Colorado; Texas Tech University in Lubbock, Texas and University of Mississippi in Oxford, Mississippi.
They comprise 3,275 single bedrooms with shared kitchen and bathrooms with an average vacancy rate of less than 5%.
The portfolio was acquired from entities controlled by Kayne Anderson Real Estate.
The transaction represents the first investment by the JV between the two companies.
Hana Financial will boost investment in student housing assets for which institutional investors are increasingly showing an appetite, it said in the joint statement.
The brokerage company is one of 12 subsidiaries of Hana Financial Group, a leading banking group in South Korea, which has more than $400 billion in total assets.
Scion has invested in over $6 billion of student housing projects since its inception in 1999.
By Hyun-il Lee
<Edited by Yeonhee Kim>
(Photo: Getty Images Bank)