Keppel's private fund invests A$198 million in two education assets

The Edge Singapore
2-min read

Keppel's education fund invests A$198 million in two assets taking Australian AUM to A$4.8 billion

Keppel’s private fund, the Keppel Education Asset Fund (KEAF), is expanding its quality portfolio with the acquisition of two education assets in Sydney, Australia, at an aggregate purchase price of approximately A$198 million (approximately $175 million). This would bring Keppel’s portfolio to A$4.8 billion ($4.3 billion) of assets in Australia upon completion of both acquisitions.

The fund is backed by institutional investors, including a large sovereign wealth fund and pension funds. KEAF’s investment objective is to make strategic investments in education-related assets, including those in the kindergarten to 12th grade (K12), higher education as well as research and tertiary education segments in the Asia Pacific.

Keppel, as the sponsor, has committed US$50 million to KEAF. Following its launch in 2020, KEAF has successfully worked with established operators to capitalise on the fast-growing education sector in the region, and currently has two education assets in Singapore and Japan.

The first education asset KEAF acquired in Australia is an existing purpose-built campus strategically located in Kensington, Sydney, which is a 15-minute drive or 20 minutes by light rail to the Sydney central business district. The property has a total net lettable area of approximately 10,700 sm. It is currently fully leased to the University of New South Wales (UNSW) on a long-term basis. The acquisition of the asset was completed in August 2023, and allows KEAF to participate in the healthy fundamentals and recovery of the tertiary international education sector in Australia.

KEAF’s second acquisition in Australia is a seven-storey commercial building in North Sydney to be acquired under a forward purchase agreement. Under the agreement with the vendor, extensive asset enhancements would be carried out to the existing building to upgrade and convert it to a K12 independent school campus, which will yield a total net lettable area of approximately 9,150 sm. Located within the Ward Street Precinct in the heart of the North Sydney central business district, the property is well connected by major arterial roads and public transportation nodes, with the existing North Sydney train station within walking distance, and the soon-to-be-completed Victoria Cross metro station in close proximity.

The property comes with pre-commitment from a leading global operator of premium schools for a long-term lease. The completion of this acquisition is subject to the fulfilment of conditions precedent and is expected to take place by the first quarter of 2025. The acquisition allows KEAF to tap into the strong demand by both locals and overseas students in the Sydney independent K12 schools market.

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