One of Australia's largest institutional investors, AMP Capital, has teamed up with major UK investor Arlington to stake a claim for the $2 billion student accommodation giant Campus Living Villages.
The blockbuster auction is entering a critical phase. Street Talk understands management presentations have been held for the past week in Sydney at the UBS offices and meetings are still continuing.
First round bids were lobbed for CLV's vast 45,000 bed portfolio in December.
Macquarie's dealmaking arm, Macquarie Capital, was seen as an obvious frontrunner for the CLV portfolio after announcing a global tie-up in October with Greystar Real Estate Partners to invest in rental residential, including student accommodation.
Now AMP, advised by Rothschild, has joined the fray. Its co-bidder, Arlington, is already well-known to CLV, investing alongside the student accommodation player in the UK.
Three years ago Arlington and CLV joined forces to buy out Opal Student Property Group's British portfolio of 4500 beds, and have extended the relationship in 2014 by co-investing in Goldsmiths Student Village, also in the UK.
AMP itself is no stranger to student accommodation, with a number of facilities under its control already, including at Sydney University.
And when AMP undertook a $300 million capital raising for its long-running infrastructure fund last year, the fund manager flagged further investment into student accommodation as a priority.
It is understood the final stage of the CLV auction has attracted at least five serious bidders. Site tours are underway and could take some time still to complete, with a CLV portfolio that extends across Australia, the UK, the US and New Zealand.
The tours will go for another two weeks before final binding bids are due at the end of March.
UBS spent considerable time marketing the business to prospective offshore buyers, including Asian real estate and investment funds.
The sheer scale of the proposed CLV deal has attracted attention - the winning bidder may need to write out an estimated $800 million equity cheque - as too has the asset class itself.
Student accommodation has shown a rapid evolution in recent years as institutional investors became increasingly comfortable with it.
In Australia, the supply of student accommodation is struggling to keep up with demand as an increasing number of international students enrol in the tertiary sector.
Among the major players here Scape Student Living - now backed by both European and Asian investors - has a national portfolio and $1 billion of planned projects in Melbourne alone.
Brisbane-based Blue Sky Private Real Estate, which is in a joint venture with Goldman Sachs, has a national pipeline of more than 3000 beds.
