Scape counts on reopened borders and readies for student return
Open and they will come: that’s what Scape Australia is gambling will happen after deciding to re-open all its student accommodation despite no federal government clarity on when foreign students will be allowed back into the country.
Australia’s biggest student accommodation operator says it will have all 15,000 beds in its property portfolio ready by Christmas, weeks ahead of the new university year when it is expected classes will be held onsite rather than remotely.
Scape’s executive director, Craig Carracher, said the business “mothballed” several buildings through COVID-19 and didn’t open a couple of new ones in Sydney and Melbourne after they were finished because of low demand.
Occupancies have been running at about 25 per cent, Mr Carracher said.
And yet, he remains positive about the future, to the extent that Scape is canvassing its investors about contributing more than $500 million to a new student accommodation development fund.
Scape is already involved in a small-scale NSW government trial to bring in foreign students, with the first plane due to land on December 6, and believes that borders will be open to all double-vaccinated people by early next year.
“We’ve made a board decision to operationalise all of our buildings,” Mr Carracher said.
“We have about 4500 bedrooms that are either mothballed or not opened. From 1 December all those buildings will be fully opened and operational and resourced in anticipation of borders opening for students on scale.
“We just can’t fathom an Australia where we don’t see borders opening more aggressively sooner.”
He said it was necessary to act now because of the long lead times involved, and that Scape was also looking for staff, advertising for 76 new employees.
“So we’ve taken that decision and are moving forward in anticipation and readiness for borders opening,” said Mr Carracher.
“Even though we don’t have a full digital certification process globally for vaccine, we are confident there will be a relatively simple process to allow international students coming in if they have the got the approved and recognised vaccines.
“These are massive investments off the back of a very small current turnover because we lost 90 per cent of our revenue.”
Mr Carracher said Scape was discussing with new and existing investors the launch of a third development fund for the brand. About $1.2 billion was raised for the first two funds.
“We’re in pretty active dialogue about a third development fund and are already sourcing a pipeline of assets. It will be about $500 million to $600 million,” he said.
