Top marks for assets

STUDENT housing has moved into the spotlight as a viable asset class, with superannuation funds and high net-worth individual developers all keen investors.
Nanjing Night Net

The attraction is that the apartment-style living, particularly in or near the city fringe, is easily built and offers good returns, as occupancy is in most cases close to 100 per cent.

For developers, the costs can be contained as the furnishings can be more budget-oriented, as opposed to luxury-apartment projects, and amenities can be kept simple.

One of the largest has been near the southern end of Sydney’s central business district, with the redevelopment of the former Kent Street brewery site by Frasers Property.

That group recently launched an expressions of interest campaign to institutional investors for its student development at Central Park on Broadway.

Other private providers of student housing in Australia include UniLodge and Urbanest.

The campus of the University of Technology, Sydney has also had an explosion of new student digs nearby and more older-style properties in the area are expected to be snapped up for the students.

It is said that super funds including Hostplus, Rest Industry Super and Equipsuper have investments in student accommodation.

One of the largest groups in the sector is Campus Living Villages (CLV), the operator of the Campus Living Funds Management, which, in turn, is wholly owned by Transfield Holdings, the private holding company of the Belgiorno-Nettis family. CLV has total gross assets of $1.1 billion and controls more than 35,000 student beds worldwide.

The University of Technology, Sydney has had new student accommodation built in Ultimo as a direct response to the need for student housing in the immediate area.

It was completed as part of an overall vision for the regeneration of the university’s city campus project. It comprises 720 student beds over 13 levels, in addition to common areas.

The director of the architectural firm Nettletontribe, Trevor Hamilton, said student housing was now firmly an asset class and investment opportunity in its own right.

He said the firm had also worked on projects with the Australian National University, Deakin University and the University of Sydney. The practice is now working on eight projects throughout the country.

”Some developers have formed private-public partnerships with universities, where they will fund the projects on university-owned land, whilst in other cases universities take on the development risk themselves,” Mr Hamilton said.

”One key source of government funding, the National Rental Affordability Scheme, awarded the University of Canberra funding contribution for the development of 1000 beds through its round four of the scheme.”

The National Rental Affordability Scheme provides an incentive to approved business and community organisations that build and rent dwellings to eligible low- and moderate-income households at a rate that is at least 20 per cent below the prevailing market rate.

This story Administrator ready to work first appeared on Nanjing Night Net.