Student management

[+] Ground Zero of student accommodation is growing again

Student housing giant Iglu is targeting half a dozen Sydney universities and colleges with an 18-storey mixed-use tower, its second development along the city center’s Anzac Parade.

Iglu has filed plans with Randwick City Council for 300 student accommodation beds in 285 rooms spread over 16 floors above a three-story podium built around a landscaped courtyard.

Bates Smart Architecture has won a design competition to create a design for the $53 million development across four lots totaling 1,580 square meters. They will retain the facades of four existing buildings from the 1940s on the front of the podium.

The complex is described as “a car-free building” with a single-storey basement dedicated to offices, bicycle parking and end-of-course amenities.

But Iglu’s bid pales in comparison to his other plans for a huge 1,000-bed development on almost a hectare, also on Anzac Parade, and just 550m from their bid in Kingsford.

Iglu, which is backed by Singapore’s sovereign wealth fund GIC, has won a tender for a 99-year lease on the site owned by the University of New South Wales, just opposite the University’s Kensington campus. institution.

▲ Renderings of the student housing tower designed by Bates Smart Architecture that Iglu is proposing for an Anzac Parade site in Kingsford, Sydney.

Iglu director Jonathan Gliksten said they expect to submit a development application for the development within the next two months, following planning and design work with the property management and consultancy of Iglu. UNSW.

“We presented a proposal to the university for 1,066 student accommodation beds and around 3,000 m² of retail space,” Gliksten said. The urban developer.

The Iglu concept – next to the National Institute of Dramatic Arts (NIDA) – will include five student accommodation buildings, offices, parking, retail and catering facilities.

“The top location will focus on the student experience and creating a space that attracts and enhances the lives, learning and socialization of our students, and is an attractive addition to the Kensington community” , said Jeff Peers, UNSW’s director of real estate.

Anzac Parade and the surrounding area is quickly becoming a hive of purpose-built student housing (PBSA) activity – and Iglu is not alone.

Two years ago, leading specialist investment manager Cedar Pacific entered the Sydney student housing market after taking control of an $80million ‘supersite’ in Kensington. The merger of 24 private properties constituted more than 4000 m² of land.

Others followed and the NSW PBSA market now provides 16,500 beds for students.

But despite having 11 universities, that number of beds is still considerably lower than that of Victoria, which provides more than 26,000 beds in around 60 PBSA buildings.

▲ Rhe 18-storey, 370-bed student building in Redfern.

Glicksten describes Sydney as the biggest but tough market.

“It’s very difficult to find venues in Sydney,” he says. “Land prices are very high. And we only have these two properties.

“And, of course, this is now compounded by very high construction costs, which have increased by around 25% over the last year. It’s difficult, there’s no doubt about it. »

The Property Council of Australia has warned that more investment is needed to expand student accommodation if the sector is to accommodate 700,000 students by 2027.

In a report released this week, the board said the PBSA had already played a crucial role in the country’s economic recovery, injecting around $40 billion or 2% of gross domestic product annually, while dampening demand in a tightening local rental market.

Over the past decade, the total number of LNPP beds nationwide has risen to 76,500 in 200 developments and will approach 100,000 by 2025, according to projects currently in the planning or development phase. .

Around 521,000 international students are enrolled and studying in Australia, spending an average of $4,400 per month, slightly less than the average Australian.

▲ Inside the PBSA property of Iglu on Broadway.

Gliksten agrees, saying most student housing providers are now back to full occupancy.

“It is therefore indicative of the very strong demand for student accommodation. And probably around 30% of Chinese students still haven’t returned to Australia. So yes, there is definitely demand there.

While the sector serves students from 170 countries, a large source of demand is local students with 26% Australian students, just behind the 27% from China.

In releasing the report, Student Accommodation Council executive director Torie Brown said there had been a clear shift among domestic students who are now turning to PBSA due to extremely tight residential rental markets and the superior offering from PBSA that is tailored to their needs.

“Without PBSA, we would have tens of thousands more people looking for rentals in an already tight rental market, driving prices up to even more unaffordable levels,” Brown says.

Australia’s PBSA sector has traditionally relied on foreign investment, as domestic experience in the asset class has historically been limited due to perceptions around short-term rentals.

For foreign investors, numerous levies and taxes across the country continue to discourage international investment.

▲ The Anzac Parade site at Inglu is a close neighbor to UNSW. Source: near the map

PBSA providers are governed by Residential Tenancy Acts (RTAs) which often do not separately define the asset class. Agreements are often treated the same as private rentals or boarding houses, despite significant differences between the two forms of accommodation.

Brown says state governments and local councils should ensure zoning and development approvals are transparent, accessible, and timely to support PBSA development and prepare for the next wave of international students.

“The development of new PBSA assets should be considered in conjunction with policies to increase and develop Australia’s share of international students and support around international education,” Brown said.

“Otherwise, the government is encouraging students to compete with existing Australian residents in the private rental market without increasing student accommodation options.

“Right now, governments need to consider how they can remove barriers to investing in this asset class.

“Reducing taxes from foreign investors will ensure we have enough beds to meet growing demand, including from domestic students, and avoid putting increased pressure on an already tight rental market.”

Education remains Australia’s fourth largest export behind iron ore, coal and gas, and international education is the country’s largest services export.

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