GIC and UNITE Group plc Extend Joint Venture
Sovereign wealth funds can be a patient source of capital for property development firms in metropolitan markets. Student housing in central London continues to attract banks and foreign investors. By creating joint ventures, sovereign investors assist real estate development firms lessen debt impact on their balance sheets, enabling financial flexibility. There are risks to investing in student housing. Demographics, government policy, and fruitful marketing by UK universities impact the potential number of students. Two major risk inputs are the number of students needing housing and current supply in the property market.
The UNITE Group plc and GIC Real Estate, the real estate arm of the Government of Singapore Investment Corporation announced an extension of their existing joint venture called UNITE Capital Cities. Starting in March 2005, UNITE Capital Cities was created to develop new properties and focus on capital intensive projects in the United Kingdom student housing sector. The UNITE Capital Cities portfolio holds a portfolio of 15 properties located in London and Edinburgh valued at over £385 million. UNITE Group has a 30% holding interest in UNITE Capital Cities, with GIC RE holding the remaining 70%.
The UNITE Capital Cities joint venture is being extended from March 2013 to September 2012.
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