March 6, 2015 / 11:49 AM / in 3 years

Canada Pension Plan pays $1.67 billion for UK student accommodation

LONDON (Reuters) - Canada Pension Plan Investment Board (CPPIB) said on Friday it had paid 1.1 billion pounds ($1.67 billion) to buy Liberty Living, one of Britain’s biggest providers of student accommodation.

In a search for yield as fixed income returns diminish, pension plans globally are increasingly looking to buy into other high-yielding assets to maintain returns and meet their long-dated liabilities, with real estate chief among them.

As part of the deal, CPPIB said it had bought more than 40 residences in 17 of the largest university towns and cities across the UK, containing more than 16,700 rooms, from Brandeaux Student Accommodation Fund.

The deal also includes the Liberty Living management platform, it added in a statement.

“As a long-term investor, this is ... an ideal platform through which we can build further scale,” said Andrea Orlandi, Managing Director, Head of Real Estate Investments Europe, CPPIB.

“This sector is an attractive one for CPPIB and we expect to see continued demand for well-located and well-managed student residences such as those within the Liberty Living portfolio,” Orlandi added.

Macquarie Capital acted as sole financial advisor to Toronto-headquartered CPPIB, which invests C$238.8 billion globally across a range of asset classes independently of the Canada Pension Plan and at arms-length from government.

CPPIB currently has C$26.3 billion invested in real estate.

Editing by Jeremy Gaunt

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