KKR Infrastructure is competing against real estate investors to buy Brookfield’s EUR 1.3bn Spanish student accommodation company Livensa Living.

KKR has been shortlisted for the final round of an auction that was launched by Brookfield at the beginning of the year and is considering investing via its infrastructure arm, said sources familiar with the situation. The investor has previously made other student housing deals in the US and Europe via its real estate funds.

The US firm is running against Canadian pension fund CPP Investments, which is bidding through its real estate arm and was also shortlisted after submitting a non-binding offer earlier this month, according to the sources. CPP already has investments in the sector through its Amsterdam-headquartered platform Nido Living.

Texas-headquartered real estate investor Hines and Global Student Accommodation (GSA), a London-based fund manager focused on student housing, have also advanced to the second bidding round, the sources added.

Binding offers for Livensa are due in mid-May, with Brookfield hoping to fetch an enterprise value of around EUR 1.3bn, a multiple of close to 29x the EUR 45m EBITDA of the business from last year, said the sources.

The Canadian investor is working with advisors Eastdil Secured, Morgan Stanley and Credit Agricole on the sale. Eastdil is also preparing a staple debt package of up to around EUR 650m to help bidders fund the deal and has contacted potential lenders, according to one of the sources.

Brookfield’s real estate arm set up Livensa in 2020 with the acquisition of a portfolio of student residences, mostly under construction, across Spain and Portugal with local real estate investor Temprano Capital.

The company today owns 23 buildings with 8,000 beds and has plans to reach 20,000 beds by 2028.

The steep sale multiple expected for the deal is linked to strong growth prospects for the company, given the large demand for student housing in Spain.

Real estate group Savills calculated in a research paper last year that there are 107,000 available beds in 850 student housing buildings across Spain, while potential demand stands at 543,600 beds, from international students and students enrolled in universities outside their home provinces.

International students, in particular, are seen as a key target for companies such as Livensa, as they are more likely to use student housing rather than other private housing. Their number is also growing fast, and they now represent 11.4% of Spain’s total university students, up from just 5.6% in 2010.

KKR is not the first infrastructure investor to have spotted an opportunity in this market. In 2022, PGGM’s infrastructure arm agreed a deal to buy Barcelona-headquartered student housing provider Resa for an enterprise value of around EUR 800m, paying a multiple of around 22x.

Brookfield, Morgan Stanley, Eastdil, KKR, CPP Investments, Hines and GSA declined to comment. Credit Agricole did not respond to requests for comment.