Alignvest Student Housing agreed to sell all of its real estate investment trust's properties in a nearly $1.7 billion deal that would create Canada's largest student accommodations provider as investors across the globe aim to increase their holdings in the sector.

Alignvest said Wednesday it has entered into agreements with Forum Asset Management for its Forum Real Estate Income and Impact Fund to acquire the assets and liabilities of Alignvest Student Housing Real Estate Investment Trust, or ASH REIT, for $1.686 billion payable in cash and units of the Forum fund. Alignvest, based in Toronto, said the price represents "a substantial premium to ASH REIT’s current net asset value."

Privately held Alignvest said ASH REIT's portfolio contains 17 properties with 7,159 beds located in seven university markets.

"We have structured a transaction which will allow our unitholders to roll their units into Forum REIIF on a tax-deferred basis for Canadian income tax purposes. With this transaction, our unitholders will have the opportunity to continue to participate in the Canadian student housing sector, which has consistently experienced high demand and is expected to keep delivering strong investment returns," said Sanjil Shah, managing partner of Alignvest Student Housing and its REIT, in a statement.

The deal has been struck as investor appetite for student housing properties has increased in Canada and other parts of the world. In a global survey of 130 student housing developers and companies, sector data firm Bonard found that 82% of respondents said they expected to see investment volumes in purpose-built student accommodations increase in 2024.

Reza Satchu, managing partner of Alignvest Management Corp., the parent company of ASH Inc., and a Trustee of ASH REIT, said the company has been negotiating with Forum for several months.

"This transaction, with nearly 10,000 beds, will result in the largest student housing platform in Canada and benefit from expected scale efficiencies," said Satchu. "Unitholders will have access to Forum's substantial development pipeline, which should facilitate further growth."

Forum Asset Management said the deal would give its fund more than 10,500 beds, and with that scale, it plans to expand its purpose-built student accommodation business.

"This combination marks a pivotal step in Forum's journey and is a testament to our team's hard work and dedication in building a leading alternative asset manager," said Richard Abboud, founder and chief executive of Forum Asset Management, in a statement.

Aly Damji, the managing partner of real estate of Forum Asset Management and head of the fund, said the deal enhances its unitholders exposure to a more extensive pipeline of products in Canada's top markets.

The company said the enterprise value of its assets under management is currently more than $1.7 billion.

Alignvest said the Forum transaction is scheduled to close before the end of the year and is subject to customary closing conditions and regulatory approvals.