Wee Hur, investors to sell 50 percent stake in Australia student housing portfolio for A$568M

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Wee Hur Holdings and other unitholders in the Wee Hur PBSA Master Trust (WHPMT), which holds Australian student accommodation assets, have entered a deal to sell 49.9 percent of the trust for A$567.86 million to an institutional investor, the company said in a filing to SGX Friday.

The buyer, which has investment holding as its main activity, is a Singapore-based indirect wholly owned subsidiary of a major global institutional investor, Wee Hur said. Citing the credibility of the buyer’s parent company, Wee Hur said it accepted an equity commitment letter rather than the usual deposit or earnest money.

Under the deal, Wee Hur will sell a 9.9 percent stake in the trust, and other unitholders will sell a 40 percent stake, the filing said. The deal, which values to entire portfolio at A$1.14 billion, will be completed over three stages as the properties are completed, Wee Hur said.

The trust’s manager was required to prepare an exit strategy for WHPMT’s investors prior to the 30 June 2022 expiry of the master trust, the filing said.

After the deal’s completion, Wee Hur will continue to hold 50.1 percent of WHPMT, the filing said.

WHPMT’s portfolio, which has been built up since 2015 on a greenfield model of buying land and then taking on development risk, has 5,662 beds across seven purpose-built student accommodation (PBSA) assets in Sydney, Melbourne, Brisbane, Adelaide and Canberra, the filing said. Four assets are operational and three will be completed by end-2023, Wee Hur said.

“We are extremely pleased to have done a recapitalisation of our first Australia focused PBSA fund, providing exit certainty for our investors within the fund term and providing a war chest for the group from the partial recycling of capital should further investment opportunities arise. We are also pleased to welcome our new partner and look forward to further partnerships in the future,” Goh Yeow Lian, executive chairman of Wee Hur, said in the statement.

In addition to WHPMT, Wee Hur is also managing a single-asset PBSA fund of 410 beds, the filing said.

Goh said Wee Hur is seeking more opportunities in Australia PBSA assets.

“Our belief in Australia’s export education sector has not changed since we started investing seven years ago. Australia definitely remains a strong tertiary education destination that will continue to attract tertiary students, international and domestic alike,” Goh said.

Wee Hur said it planned to use the proceeds for re-investments in existing businesses, acquisitions and working capital.