Scape Franklin Street, in central Melbourne, is the largest asset included in the developer’s $6 billion fund. With 50,000 square metres of gross floor area, it is the largest mixed-use and education building globally. Photo:

Student bed pipeline jumps 19pc in six months

Michael Bleby|11 hours ago

The pipeline of dedicated student accommodation beds has jumped almost 19 per cent in six months, with Melbourne, Brisbane and Sydney accounting for the largest shares of the growing market, new figures from the Property Council of Australia and consultancy Urbis show.

Scape Franklin Street, in central Melbourne, is the largest asset included in the developer’s $6 billion fund. With 50,000 square metres of gross floor area, it is the largest mixed-use and education building globally.

The increase of 5605 beds in the second semester of 2024 to the pipeline of 30,000 in the first semester reflected the strong private sector appetite to keep purpose-built student accommodation even as both major parties promised to cut student numbers to relieve housing pressures.

“The need for more dedicated purpose-built student accommodation is clear, and the investor fundamentals in Australia are strong,” said Torie Brown, head of the council’s student accommodation arm.

“Both sides of politics have flagged plans to reduce the impact of international students in our cities. We maintain that the easiest way to increase housing for students and to reduce their demand on the private rental market is to work with the sector to increase development.”

Private sector interest – and capital – in the sector is growing. In January, developer Scape tipped its student housing assets into a $6 billion open-ended fund in a bid to give a wider pool of investors exposure to the nascent asset class.

Last year, Canadian property giant Brookfield said it would double its student beds pipeline in Australia to $2 billion, and would partner with the country’s major universities to provide much-needed accommodation.

A month earlier, Greystar agreed to buy Singapore’s sovereign wealth fund GIC’s Australian student accommodation business for $1.6 billion.

Momentum is returning to the sector. Between 2016 and 2024 the country opened on average 6000 new beds a year, a figure likely to have halved in both 2024 and this year, the Urbis Student Accommodation Benchmarks report shows.

But completions were likely to pick up again next year, getting back to the 6000 mark by 2027, the report says.

Of the 11,102 beds currently under construction nationally, 9492 – more than 85 per cent – were being funded by private student accommodation providers.

There were a further 14,938 beds approved for development, with 9565 waiting for development approval nationally, the report shows.

The three east coast capitals account for the majority of the national pipeline, Urbis director Clinton Ostwald said.

“Projected completions are picking up over the next three years, with developers continuing to try and get into the tight Sydney market,” Mr Ostwald said.

Of the 35,605-strong pipeline, Melbourne had the largest share with 8875, followed by Brisbane at 7118 beds and Sydney at 6849 beds, the report shows.

Perth had 5354 beds and Adelaide 3121 beds while the ACT had 406.

“Perth has also seen the pipeline increase significantly in the last 12 months as the market responds to the increase in international students and an undersupply,” Ostwald said.