The real-estate arm of Singapore's state investor Temasek has paid $197.5 million for the 33-story Evo at Cira Centre South student housing tower near 30th Street Station, the latest major Philadelphia property to be snapped up by a big overseas investor.
Evo adds to a student housing portfolio that will provide Temasek's Mapletree Investments Pte Ltd. "with a diversified and sustainable income, as well as strong returns," it said in an emailed statement Friday.
The 347-unit tower was sold by a venture between Philadelphia-based Brandywine Realty Trust and Harrison Street Real Estate Capital of Chicago in a deal that closed Jan. 10, Brandywine said in a release.
The transaction follows acquisitions by South Korean, Swiss, and Kuwaiti buyers that show the growing attractiveness of second- and third-tier real estate markets such as Philadelphia, as competition among buyers in bigger cities such as New York and Los Angeles drives down returns, said Robert Fahey, a Philadelphia-based executive vice president with real estate services firm CBRE Group.
"Historically, top markets got most of the capital," said Fahey, who has participated in some of the transactions involving foreign buyers as a broker. "Now Philadelphia is included in that."
The current spate of transactions involving foreign buyers began in early 2016, when Seoul-based Korea Investment Management Co. acquired Cira Square, a 862,700-square-foot former postal building redeveloped by Brandywine into offices for the IRS, for $354 million.
About six months later, Swiss insurer Zurich Insurance Group bought the 98,000-square-foot 2.0 University Place office building in another part of University City, about a mile to the west, from a group led by developer Scott Mazo for $41.3 million.
And in November, an Oaktree Capital Management entity said to be funded by South Korean investors bought the 621,000-square-foot Duane Morris Plaza at 30 S. 17th St. for $131.6 million.
The Evo student apartment building acquired this month by Mapletree shares University City's Cira Centre South complex with Brandywine's recently completed 49-story FMC Tower and a parking garage topped with public open space, as well as with Cira Square, the former postal building.
Late last year, Brandywine began work on its $3.5 billion Schuylkill Yards development, which is slated to eventually involve 8 million square feet of office space on 14 acres, to the immediate west of the Cira Centre South complex.
The Evo sale "was a wonderful opportunity to sell a non-core asset in a really core location for us," Brandywine chief executive Jerry Sweeney said Friday during a conference call with analysts.
Evo is Mapletree's first central Philadelphia purchase, though a joint venture between the company and an industrial-focused affiliate acquired a portfolio of data center properties in October that includes a server facility used by the Vanguard Group in the city's far Northeast.
In Pennsylvania, it also owns SkyVue Apartments, a 627-bed student housing complex near University of Pittsburgh's campus.
The Evo acquisition adds to Mapletree's portfolio of 17 student housing properties across 16 U.S. cities comprising 12,000 beds as of June, when it announced its purchase of eight student apartment buildings from Kayne Anderson Real Estate Advisors of Boca Raton, Fla.
Sweeney said the addition of Evo to the Singapore-based company's student housing portfolio, along with Brandywine's earlier sale of the former postal building to the South Korean fund, demonstrate Philadelphia's growing profile as a target for investors.