Global insurance giant Allianz has snapped up 1,391 beds of student accommodation in Melbourne for $459 million from South African REIT Redefine Properties.
The towers at 18 Leicester Street and 500 Swanston Street, Carlton form part of Journal Student Accommodation Fund.
Development of Leicester Street, an 804-bed facility, was completed in 2018 while the development of the 587-bed Swanston Street property was completed in May 2020 by contractor Icon.
Selling agents from JLL were tight-lipped about the buyers of the two Carlton properties while an Allianz Real Estate spokesperson said they “had a policy of not commenting on market rumours”.
Redefine had purchased a 90 per cent beneficial interest in the accommodation during 2017 alongside Melbourne-based property developers Citiplan.
The transaction follows on from Allianz’s partnership with Charter Hall to purchase four Aldi distribution centres across the east coast of Australia for $648 million in early June.
Redefine’s financial director Leon Kok said a portion of the proceeds would be used to settle the Australian loan facilities on the properties amounting to around $132 million and secure the release of $5 million Cromwell Property Group shares.
“This transaction forms an integral part of Redefine’s loan-to-value improvement plan, which includes the disposal of approximately ZAR$8 billion of non-core assets across Redefine’s property asset platform,” Kok said .
Bookings for student accommodation could take a while to warm-up with travel restrictions hampering the sector.
Prime minister Scott Morrison said national cabinet had agreed to work closely and carefully to return international students on a small, phased scale through a series of controlled pilots.
“We are working closely with the ACT government on that, as we are with the South Australian government and there are proposals that are coming forward from other states,” Morrison said.
“I'm looking to get our economy as close as back to normal as we possibly can and to push the envelope in every possible area.”