Korea Investment and Securities is in the process of closing a $120 million deal on a new student housing building near the University of Texas in Austin, according to a new report. 

Company sources told Korean Investor, an online news outlet, that the transaction would mark Korea Investment’s third purchase of US student housing in the last year.

Due diligence on the site is currently taking place, according to the source, who said: “It is a low-risk asset with a low vacancy rate because of its proximity to the university campus.”

The deal is expected to complete this month at the earliest.

The student housing facilities, constructed by US developer Landmark Properties in July of this year, spans over 19,100 square meters. The developer will reportedly retain a 5% stake in the building as a rent manager.

Korean Investor said that, with an estimated 5% annual rent rise, the investment is expected to generate an annual return of around 7%.

Last year the investor acquired two student housing facilities worth $250 million near the Austin-based university in partnership with Tiger Alternative. This marked the first direct investment by a South Korean investor in the student housing segment.

Date published: 17 September 2020

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