Student accommodation is emerging as one of the hottest asset classes in Australia, with major global pension funds backing local operators Scape Australia and Lend Lease-supported Capella Capital looking to win work as more than $1 billion of deals come to a head.
The sector is surging as foreign groups look to get set as international student numbers rise and universities turn to the private sector to meet their housing needs with James Cook University close to choosing a partner and Curtin University, advised by CBRE, and the Australian National University, counselled by Flagstaff Partners, also seeking private investment.
The country’s largest specialist player, Campus Living Villages, has appointed investment bank UBS as it seeks to raise capital for its rapidly expanding business.
New entrants include South Africa’s Redefine Properties, British outfit GSA Group and a cohort of Singaporean players including Wee Hur Holdings and Centurion Corporation. UniLodge, Urbanest,
Student Housing Australia, and Iglu also have a large presence.
But locals are also making their mark with Capella Capital thought to have teamed up with operator The Pad to secure work from James Cook University, at two northern
JCU said that talks over a tender to build and operate accommodation on its Cairns and Townsville campuses was “well advanced” but declined to identify the leading bidder. Lend Lease also declined to comment.
JCU is considering building 250-300 beds in Cairns and a further 500 beds in Townsville campus, with the works worth $80 million in total with the management worth a further sum. “A decision on the successful proponent is expected later this year,” a JCU spokesman said.
Local platform Scape Australia is also bulking up. Dutch pension fund asset manager Bouwinvest has just joined fellow Netherlands group APG with a new $150m capital commitment to the group.
Bouwinvest and APG each committed half of the fresh capital that followed a $100m investment from Chinese heavyweight ICBCI last November.
“Along with our existing partners APG and ICBCI we are now ideally positioned to turbo charge the delivery of our world class product in Australia and New Zealand,”
Scape Australia chief executive Stephen Gaitanos said.
“The sector in Australia is maturing rapidly and we continue to be encouraged by the scale of the opportunity in our markets. The sector remains years behind Britain and the United States despite being the leading education market in Asia,” he said.
The larger capital base will allow the venture to build out its pipeline, with Scape close to securing its first development site in Auckland.
The venture controls eight development sites across Sydney, Melbourne and Brisbane with plans to deliver over 4000 rooms. Scape is already expanding in the hot Brisbane market, buying a property in the city’s Vulture Street next to its 780 studio development at Southbank.
Scape already has a site at Toowong and
The Australian understands it is talks with an Asian pension fund to close out its first fund at about $500m. The group has acquired two assets in Sydney, in Abercrombie Street and Wilson Lane for about 300 studios and in Melbourne its Swanston Street property will have 760 studios.
That property is expected to open in early 2018 and Scape has three nearby properties in Melbourne, including two on LaTrobe and Little Latrobe streets, as well as another property on Swanston Street at the Carlton & United Building site.
The latest capital raise took the Scape platform to $460m of equity commitments, giving the off-campus student accommodation provider the capacity to grow.
“We are excited to join the Scape Australia JV which we feel is uniquely positioned to benefit from the attractive fundamentals for the
student accommodation sector in Australia,” Bouwinvest regional manager Asia-Pacific Tjarko Edzes said.
Original article published at www.theaustralian.com.au by BEN WILMOT 21/7/16