Student housing news roundup: Asia Pacific student shelters spark property investors interest, and other stories

For PropertyGuru’s news roundup, we zoom in on student housing in APAC. First, the number of students in higher education in Asia Pacific has bounced back after the pandemic, sparking high interest in real estate investors. Next, Australia’s largest student accommodation company, Scape Australia, has struck a partnership with Dutch pension investor APG Asset Management and Canada’s Ivanhoé Cambridge to develop purpose-built student accommodation assets. Lastly, Hong Kong experiences a shortage of student accommodation as the population of non-local students grows rapidly.

Asia Pacific student housing sparks investor interest

The number of students in higher education in Asia Pacific has bounced back after the pandemic, opening up opportunities for real estate investors to provide purpose-built accommodation, according to a Savills report.

Real estate investors worldwide are targeting resilient sectors with a strong operational element, so student accommodation is proving attractive in many places. For example, Savills Research predicts EUR12 billion will be invested in purpose-built student accommodation (PBSA) in Europe over the next two to five years.

Australia is the most developed market in the Asia Pacific region, with several specialist operators. International students are a key driver of the market, in contrast with India, where huge demand for accommodation is driven by domestic students.

Other markets in the region offer potential; however, India and Australia have seen the most interest from real estate investors.

Scape Austalia strikes AUD1 billion venture as student sector fires up

The country’s largest student accommodation company, Scape Australia, has struck a fresh AUD1 billion partnership with Dutch pension investor APG Asset Management and Canada’s Ivanhoé Cambridge to develop purpose-built student accommodation assets in Australia’s thriving student housing sector.

realcommercial.com.au reports that the move comes amid continued stress in the rental market and the failure of the AUD26 billion international education industry to provide accommodation, pushing at least 400,000 inter­national students into the private rental market.

Scape executive chairman Craig Carracher has lofty hopes for the sector in addressing housing shortages but said that it faced regulatory challenges, with rules favouring build-to-rent providers.

Hong Kong faces a shortage of private student accommodation: JLL

Hong Kong is transforming into an international hub for post-secondary education. JLL released its “Unlocking student accommodation market in Hong Kong” report and estimated the influx of non-local post-secondary students and tightened availability of university hostels will create an additional spillover demand of 22,300 bedspaces into the private accommodation market in the coming four years. This will fuel private student accommodation to be a new investment asset and boost the investment value for purposing assets, particularly hotels and residential, into student accommodation.

In a ReTalk Asia report, Oscar Chan, Head of Capital Markets at JLL in Hong Kong, said: “Rental prices in Y83, the largest private student accommodation in the city, recorded an annual growth rate of over 10 percent since 2022. We observed that the rents of private student accommodation have soared at an accelerated pace in the last 12 months and reached 15 percent, the highest. Residential rents have increased by 7 percent since the borders reopening in early 2023, while the room rates of hotels also increased. The rents of private student accommodation are expected to grow further as the demand for student accommodation is currently underserved and the population of non-local student is growing rapidly. Private student accommodation will be a new investment property asset.”

The Property Report editors wrote this article. For more information, email: [email protected].