Fund Tied To Pamoja Capital Backs Melbourne Student High-rise

The Australian arm of Luxembourg-based private equity firm Pamoja Capital, the investment vehicle of Canadian classifieds' billionaire John MacBain, has swooped on a Melbourne development site slated to become one of the world's tallest student housing towers. 

The 1172 square metre former Motorcycle City site at 478-488 Elizabeth Street overlooking Queen Victoria Market was snapped up for $35 million in September last year by alternative real estate investment manager GreenFort Capital with a permit in place for 52-storey building with 400 apartments and close to 200 hotel rooms.

GreenFort has now on-sold the site to Pamoja's Australian Education (Holdings) Pty Ltd ahead of the anticipated approval of a permit modification allowing 864 student accommodation beds and co-working space over 52 levels. 

The Elizabeth Street deal will see GreenFort Capital stay on to assist with development management of the scheme, while taking a healthy profit on the sale. 

The price was not disclosed, but local commercial agents said the site was a lot more valuable as student accommodation, given its proximity to a number of universities. 

Great outcome 

Pamoja, which has a major shareholding in student housing giant UniLodge, has been active in Australia in the past. 

According to its website, Pamoja invests in "socially responsible global investments" in the $US5 million-$US100 million range across sectors including education and real estate. 

Adam Vaggelas of GreenFort Capital said the transaction was a great outcome for the group. 

"We saw an opportunity to enhance value for a student use given the site's prime location and the strength of the Melbourne education market," Mr Vaggelas said. 

"We were considering a number of options for the project and are happy with the outcome. We look forward to working with the new owner." 

The sale to Pamoja follows listed Singaporean developer Wee Hur paying $35 million at the start of the year for a vacant Melbourne commercial building that it will develop into high-rise student accommodation. 

Larry Schlesinger
Published on March 7, 2018