Universities Invest in Student Housing Amid Shortage

Australia’s student accommodation sector is booming, with major institutions securing key properties despite a tightening market. UNSW recently acquired a high-demand student housing complex near its Sydney campus, while investment funds are targeting similar assets in Melbourne. These moves come as bed numbers have nearly doubled in the past decade, reaching over 132,000 nationwide. However, a crackdown on international student numbers is adding pressure to an already undersupplied market.

The recent Sydney acquisition sees UNSW purchasing a property just 600m from its Kensington campus. Spanning 7,884 square metres, the site was previously owned by an Asian investment group. The university aims to counter rising rental costs and maintain high accommodation standards by directly managing more student beds. UNSW currently operates 15 student housing complexes on campus, with additional projects in planning that could add 2,200 beds over the next five years.

Meanwhile, in Melbourne, British property giant M&G Real Estate is making its first foray into Australia’s student housing market with the $100 million purchase of the Park Avenue complex in Parkville. Close to University of Melbourne, Monash and RMIT, the building has 369 beds across 328 units and is expected to benefit from the new Parkville metro station opening later this year. Investors remain optimistic about the student sector, which has shown resilience despite broader commercial property struggles.

Experts suggest that long-term leases and CPI-linked rent increases make student accommodation an attractive option for investors. Other high-profile sites, such as the Royal Park Melbourne complex, are also drawing significant attention as the demand for rental income grows. With universities and institutional investors doubling down on student housing, the sector looks poised for further expansion despite regulatory hurdles.

Source: The Australian, Australian Conveyancer