Australian Student Accommodation Market Review - JLL AU Student... · Iglu | Franklin Street Source: Australian Government Department of Education & Training (uCube) Australian &

Australian Student Accommodation Market ReviewNovember 2016

Student One | Wharf Street

Some of the highlights of the market include:

• Australia attracts more international students than Britain and there are opportunities to extend this reach further as the number of international students globally is forecast to increase from around 4.5m currently to between 7m and 8m by 20251.

• The competitiveness of Australia as a place to study has improved significantly in recent years, primarily due to the fall in the value of the Australian dollar. This improved competitiveness has resulted in a substantial increase in the number of foreign students within Australia after several years of stagnant growth. Sydney and Melbourne appear to have been the major beneficiaries from Australia’s greater competitiveness.

• The number of international students in Higher Education has continued its recent strong growth, with growth of 9.7% recorded in 2015.

• India has continued to record very strong annual growth and now easily represents the second largest source market (after China) for students in Australia with average growth of 21.6% per annum over the past two years.

• Victoria continues to lead the way as a destination for overseas students accounting for approximately 36% of all enrolments. Monash University and RMIT University both have more than 20,000 overseas full time students enrolled.

• There are around 64,150 beds in PBSA across Australia’s top six metropolitan localities. JLL estimate the market has added around 6,000 beds over the past 12 months.

• The scale of the development pipeline varies markedly by city with Brisbane and Melbourne having particularly active markets. Competition for sites is restricting the pipeline in Sydney whilst Brisbane may experience some slightly longer initial take up periods if all beds proposed are developed, however, we do not expect that all proposed projects will go ahead.

• Rents have continued to be maintained at strong levels across the primary markets of Melbourne, Sydney and Brisbane.

The JLL Student Accommodation Market Review is an annual publication detailing the state of Purpose Built Student Accommodation (PBSA) market in Australia.

1 The Economist

3JLL Australian Student Accommodation Market Report 2016

01 Australian Higher Education

02 Student Demographics

03 Value of International Education to the Australian Economy

04 Australian Market Overview

05 New Zealand Market Overview

06 Market Activity and Outlook

Front cover image - Scape Swanston St

Contents04

08

12

13

22

24

Iglu | Franklin Street

Source: Australian Government Department of Education & Training (uCube)

Australian & Overseas Student Enrolments, 2008-2015

Australian Higher Education

In terms of realising the value that international students can present to a national economy, Australia leads the way globally, with international students now accounting for more than a quarter of all higher education enrolments. Education is now Australia’s second biggest export industry behind mining with Australia attracting more international students than Britain. Despite this position there are still significant opportunities to extend this reach further as the number of international students globally is forecast to increase from around 4.5m currently to between 7m and 8m by 2025 .

Australia’s growing popularity as a university education destination stalled between 2008 and 2013, largely attributable to Australia’s high currency and the collapse of some poorly run private colleges. However, with the currency’s fall since 2013 enrolment applications have again rebounded and were at record levels in 2015 at 363,450. The effect of this growth trend means that domestic student enrolments have easily outpaced overseas students enrolments since 2008, with overseas students averaging growth of 3.0% compared to domestic student growth of 4.5% per annum.

Domestic Overseas

Proportion of Overseas Student Enrolments

2010

2008 27.6%

28.3%

28.1%

27.4%

25.9%

25.0%

25.3%

25.8%

2009

2011

2012

2013

2014

2015

Student Enrolments

0 200,000 400,000 600,000 800,000 1,00,000 1,200,000

4 JLL Australian Student Accommodation Market Report 2016

01

The Times World University Rankings QS World University Rankings

Australian National

University

University of Melbourne

University of Sydney

University of Queensland

University of New South

Wales

Monash University

University of Western Australia

University of Adelaide

22 47 33 33 46 60 51 60 49 78 65 74 102 125 125 142

Ranking 2016Ranking 2015Ranking 2014Ranking 2013

100+

0

52

28

66

96

53

27

65

98

59

34

71

102

18

3748

69

16

47

71

33

9

2631

42

Brisbane Canberra AdelaidePerthMelbourneSydney

Australian universities feature prominently in the various world university rankings lists. Given the large contribution international student enrolments make to both the functioning of various universities and the local economy, these rankings are an important factor that help to distinguish the university in an increasingly competitive environment. Australian universities are generally ranked more favourably within the QS rankings relative to The Times rankings. Depending on the ranking methodology adopted, either Australian National University or the University of Melbourne is regarded as the top ranking institution within Australia. All Australian universities have generally maintained similar positions over recent years.

A key factor driving the growth in overseas student enrolments in recent years has been a dramatic easing in the cost of living. The cost of living is a key consideration for many overseas students and the softening of Australia’s currency over the past two years has certainly helped make Australia a more attractive place to study. The Mercer Cost of Living Rankings highlight the change in affordability of Australian cities, with dramatic drops evident across all cities. Interestingly however is that despite Sydney and Melbourne being consistently the most expensive cities in Australia, both these cities have been responsible for most of the growth in overseas student enrolments indicating that lifestyle factors in addition to cost and quality of universities play an equally important role in decision making for prospective students

Source: The Time World University Rankings & The QS World Rankings Source: Mercer Cost of Living City Rankings

World University Rankings - 2017 Mercer Cost of Living Rankings for Major Australian Cities, 2013-2016

6 JLL Australian Student Accommodation Market Report 2016 7JLL Australian Student Accommodation Market Report 2016

TotalFull-time Students691,669

308,704

Domestic Overseas

Part-time Students355,013

54,747

1,000,373

1,410,133

409,760

Total Students1,046,682

363,451

2014 2015

NSW

Victoria

Queensland

SA

NT

ACT

Multi-State

Tasmania

WA

0 140,000120,000100,00080,00060,00040,00020,000


Total tertiary education student numbers for 2015 continued their ongoing steady growth to reach over 1.4 million for the first time. This total represents a 2.7% increase over 2014, with domestic student enrolments increasing by 2.1% and international student enrolments growing by 4.5%.

Whilst overseas student enrolments numbers are at record levels, their overall share of total enrolments is largely unchanged over the past four years at 26%. This ratio reached its highest in 2009 at 28% indicating there is still ample opportunity for this sector to expand further.

The overwhelming majority of all full-time higher education international students are located within Australia’s capital cities. Victoria leads the way with regard to total international student enrolments, accounting for 36% of the national total. NSW follows second with 28% and Queensland third at 14%.

Interestingly is that nearly all the growth in international student numbers in 2015 has been driven by Victoria and NSW, with the other states largely failing to grow their number of international student enrolments despite various state governments becoming increasingly proactive in their support of this market.


Student Demographics02

Summary of Total Student Enrolments, 2015 International Tertiary Education Full Time Enrolments by State


0

5,000

10,000

15,000

20,000

25,000

Monash University

RMIT University

The University of Melbourne


The University of New South

Wales

Curtin University of Technology

The University of Queensland

The University of Wollongong

University of Technology

Sydney

Victoria University

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

Charles Sturt

University

Federation University Australia

The University of Melbourne


The University of New South

Wales

Curtin University of Technology

The University of Queensland

The University of Wollongong

University of Technology

Sydney

Victoria University

Australian Government Department of Education and Training shows that in 2015 there were a total of 498,155 international students studying on a student visa. This total has been averaging growth of 10% per annum since 2013. The student visa numbers differ from the higher education enrolment data due to the type of course that student are undertaking (e.g. student visa numbers also include school students and other non-tertiary education).

Of particular relevance to the PBSA market is the ongoing growth of Higher Education students given they account for the bulk of demand. This sector recorded 258,369 students in 2015, a 9.7% increase over the 2014 total. This is a record number of enrolments and continues the ongoing growth story of international students in Australia. In 2001 there were less than 90,000 international students enrolled in Australia.

So which international markets have been driving the growth in international student enrolments? As expected, China is the largest growth market. It recorded very strong growth in 2015 after only a modest increase in 2014. India has continued to record very strong annual now easily represents the second largest source market for students in Australia with average growth of 21.6% over the past two years. As this market continues to expand, the preferences of Indian students will become an increasingly important consideration in the PBSA market. Furthermore, the increasing importance of Indian students is also a positive for the Australian market in terms of a diversity perspective. It is never healthy for any market to become too heavily reliant on a single country. A major economic downturn or an external shock could greatly disrupt the flow of students and therefore a diversity of students is paramount to mitigate the risks. In this regard, both the rise of India and to a lesser degree Brazil, Thailand and Nepal should be viewed as a positive outcome.

Victorian universities lead the way with respect to total student enrolments and also the highest proportion of overseas students. In 2015 Victoria accounted for 36% of all overseas students in Australia. Monash University had around 24,500 overseas full time students in 2015 which equates to for 43% of total enrolments.

Charles Sturt University has the highest proportion of internal (i.e. on-campus) overseas students accounting for 61% of full time enrolments in 2015.



India 53,568

Nepal 15,219

China 136,097

South Korea 20,790

Hong Kong 12,864

Vietnam 21,807

Indonesia 4,189

Thailand 7,245

Malaysia 20,641

Brazil 17,267

Other Nationatilities 168,468

Source: Australian Government Department of Education & Training

Nationality of the Overseas Students - 2015

Top Growth Markets - 2015

Total Full Time Overseas Students Enrolments

Proportion of Full Time Overseas Students

16,003 studentsChina

7,269 students

2,299 students

1,775 students

1,505 students

India

Brazil

Nepal

Malaysia


Iglu | Kelvin Grove Iglu | Brisbane City

City University Provision (beds)

Commercial Provison (beds) Total Beds

Melbourne 9,546 9,648 19,194Sydney 8,721 9,041 17,762Brisbane 4,613 4,712 9,325Canberra 3,168 4,418 7,586Adelaide 2,323 3,048 5,371Perth 3,123 1,780 4,903Total Major Cities 31,494 32,647 64,141

A Deloitte Access Economics report estimated that the international education sector contributed around $17.1 billion to Australia’s GDP in 2014-15. This total included $12.1 billion in direct value added associated with fees paid to education providers and industries selling goods and services directly to students. A further $5.0 billion was added in indirect value to firm supplying intermediate inputs to providers and students.

The contribution of the sector to employment is also very significant, with the export revenue supporting over 130,000 Full Time Equivalent employees. This equates to around 1.3% of Australia’s total employment.

Despite most overseas students being located within major capital cities, the contribution of these students to regional economies cannot be overstated. Around 5% of enrolled overseas students study and live in regional areas, with these students directly supporting jobs and investment in the regions. In addition, overseas students make a substantial indirect contribution to regional areas through their demand for agricultural products and other linkages.

JLL’s analysis of the existing supply of accommodation considers the six main Higher Education cities across Australia (Sydney, Melbourne, Brisbane, Adelaide, Canberra and Perth). Historically the supply of student beds in Australia was dominated by university owned or affiliated providers. However, the ongoing increase in beds has been largely driven by commercial providers, resulting in commercially operated beds now accounting for the majority of total stock. The majority of all supply is concentrated in Sydney and Melbourne, which collectively account for around 58% of total beds. Whilst these two markets have also been the source of most of the new supply over the past 12 months, several new projects in Brisbane have also recently been completed as this city looks to rapidly expand its PBSA offering. Recent openings in Brisbane have included the repurposing of 363 Adelaide Street (formerly Boeing House) and Iglu’s new tower on Mary Street, Brisbane. Collectively these two developments have added over 1,000 beds to Brisbane existing supply.

Value of International Education to the Australian Economy

03Australian Market Overview

04


Scape | Swanston Street

With an increased focus on the student accommodation market from large institutions, there has been plenty of debate about the ability for various markets to absorb the pipeline of beds.

The proportion of full time students residing within student accommodation varies greatly between cities, with Perth estimated to have the lowest market penetration rate of 6.2%, well below Canberra where approximately 31% of students are in student accommodation.

Source: Student Accommodation Database, 2016

21%Hobart

31.4%ACT

Adelaide 9.9%

9.7%Brisbane

9.0%Sydney

8.2%Melbourne

6.2%Perth

Student Accommodation Market Penetration Rates - 2016


Feature Market – Sydney Market Overview The 2016 feature market is Sydney therefore we have provided expanded commentary on this city.

The number of full-time campus enrolled students in Sydney has experienced consistent growth over the past decade. The strongest growth in enrolments has occurred at the University of NSW, with the University of Sydney also accounting for a good share. Collectively these two universities have also seen the largest increase in overseas students.This shift in enrolment profiles helps to explain the location of new PBSA in Sydney, with proximity to both these universities being the focus.

In 2016 Sydney has a total stock of 17,662 beds with approximately 9,168 of these beds located in the CBD or CBD fringe. JLL estimates that around 21.4% of international students studying at University of Sydney or UTS are currently residing within PBSA alongside around 6.6% of domestic students. For Sydney’s other universities the proportion of students within PBSA is estimated at around 7.1%. Collectively around 9% of Sydney’s full-time students are currently estimated to be living within PBSA. The high occupancy levels within Sydney’s accommodation stock would indicate the market can certainly absorb an increased supply, particularly in the CBD given the ongoing growth in student enrolments anticipated in coming years.

Despite having an apparent undersupply of PBSA, Sydney’s supply pipeline is more modest than other major Australian cities. Sydney faces a number of barriers to entry that are currently restricting supply such as availability of appropriate sites and the viability of student accommodation development against other land uses such as residential.

Two of the more prominent PBSA developments approved in Sydney are within Lend Lease’s Darling Square master plan. Urbanest will build a 22 storey tower next to its sister 20 storey tower currently under construction. Collectively these two buildings will provide 1,300 beds upon completion. Iglu, another major student accommodation provider, will build a 370 bed tower in the Redfern Town Centre.

Sydney’s development pipeline contains around 2,150 beds which will represent a 12% increase over the current level. The overwhelming majority of these beds will be delivered in the CBD, a rate faster than the projected increase in international students. This should result in the market penetration rate for international CBD students increasing from the current 21.4% to around 24.2%. Given the current demand for beds under present market conditions, JLL expects this additional supply to be absorbed by the market without a major impact on passing rents. JLL does expect a minor tightening of demand in coming years within Sydney’s suburban PBSA market as demand for beds exceeds new supply. This market position should ensure that current rentals are maintained at the minimum with modest growth likely.

Source: JLL Student Accommodation Database, 2016Source: JLL Student Accommodation Database, 2016

Source: JLL Student Accommodation Database, 2016*JLL Estimate Source: JLL Student Accommodation Database, 2016

Total Sydney Full Time Students

Total Sydney Development Pipeline

Forecast Sydney CBD Supply / Demand Position

Total Full Time Students

Existing Supply of Beds

Overseas Student Market Penetration Rate

Domestic Student Market Penetration Rate

Total Student Market Penetration Rate

77,760

9,168

21.4%

6.6%

11.8%

CBD

120,570

8,594

17.1%

3.4%

7.1%

Suburban

198,330

17,762

19.0%

4.5%

9.0%

TotalSydney

CBD Students Suburban Students

140,000

120,000

100,000

80,000

60,000

40,000

20,000

0 2009 2010 2011 2012 2013 2014 2016*

Full Time Students

700

600

500

400

300

200

100

02017 2018 2019 2020

800

900

0%

4%

8%

12%

16%

20%

24%

28%

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

2016 2017 2018 2019 2020

Total Bed Supply (LHS) Overseas Students (RHS)Domestic Students (RHS) All Students (RHS)

CBD Beds Share of Students in PBSA


Melbourne Market OverviewThe previous 12 months in Melbourne has been marked by the ongoing expansion of suburban PBSA. Of particular note has been the completion of 1,000 on campus studio apartments at Monash University, Clayton and a further 480 beds at the UniLodge @ Victoria University. The other notable opening was the 648 bed Student Village next to the University of Melbourne. These projects have pushed Melbourne further ahead as the largest PBSA market in Australia.

Looking forward, the Melbourne market is expected to remain relatively active over the coming few years. Most of the activity will again be concentrated within or on the fringe of the CBD. Scape will be particularly active in the market through the development of two major sites on La Trobe Street and Swanston Street and further CBD sites secured and currently in planning application process.

JLL has forecast a development pipeline of around 7,900 beds to be completed over the next four years. Given Melbourne is still estimated to have a supply shortfall this additional supply should be absorbed relatively easily given the penetration rate for overseas students is well below the Sydney and Brisbane rates. Nonetheless, the effect of having large numbers of beds close to the city will put pressure on poorly managed and located developments to improve their performance.

The collective penetration rate across the Melbourne CBD and suburban markets is 8.2%.

Brisbane Market OverviewStrong support from local government and the availability of land have been instrumental in the ongoing surge in activity within the Brisbane PBSA market.

With approximately 10,000 beds proposed Brisbane has the largest pipeline of beds in the country. The softening of the Brisbane residential market has provided greater opportunity for student accommodation developments as many residential sites have been converted from a residential DA to a student accommodation DA. Of the forecast pipeline we note that not all projects have the relevant approvals therefore the actual number of beds delivered are likely to be less than 10,000.

Key projects currently under construction include UniLodge and Scape projects in South Bank, and Student One’s second project on Wharf Street. Planned projects include Blue Sky on Merivale Street, Student One on Elizabeth and Charlotte Streets and several projects are proposed in Toowong such as Scape at Coronation Drive. The Toowong projects will represent a first for this area of Brisbane. JLL expects that not all the projected supply will proceed to DA status and some of the larger proposed projects will be delivered on a staged basis allowing for appropriate absorption to occur.

The collective penetration rate across the Brisbane market is estimated to be 9.7%

Source: JLL Student Accommodation Database, 2016






112,029

9,912

12.9%

5.4%

8.8%

CBD

122,815

9,276

13.7%

2.9%

2.9%

Suburban

234,844

19,188

13.3%

4.1%

8.2%

TotalMelbourne







64,807

6,975

21.8%

6.6%

10.8%

Inner

30,950

2,350

16.1%

4.5%

7.6%

Suburban

95,757

9,325

20.0%

5.9%

9.7%

TotalBrisbane


Total Melbourne Development Pipeline


Total Brisbane Development Pipeline

3,500

3,000

2,500

2,000

1,500

1,000

500

02017 2018 2019 2020

4,000

3,000

3,500

2,500

2,000

1,500

1,000

500

02017 2018 2019 2020








37,742

3,657

20.5%

5.4%

9.7%

CBD

16,246

1,714

26.9%

26.9%

10.6%

Suburban

53,988

5,371

22.2%

5.3%

9.9%

TotalAdelaide







78,856

4,903

9.5%

4.5%

6.2%

Perth Total







24,174

7,586

46.5%

23.0%

31.4%

Canberra Total

Adelaide Market Overview Historically Adelaide has not experienced a great deal of activity within the PBSA market. However, there are two major projects currently approved that represent the growth and maturation of the local Adelaide market. Urbanest is currently developing it’s second Adelaide project, a 689 bed building on North Terrace whilst Blue Sky are also entering the local market with a 542 bed development approved on Waymouth Street.

In addition there are 2-3 development sites currently markerted as being suitable for student accommodation development.

JLL estimate that the overseas market student accommodation penetration rate is around 22% in 2016. This is amongst the highest across Australia, however the total penetration rate at 9.9% is in line with other states.

Perth Market OverviewDespite representing Australia’s third largest overseas full time student market, the Perth market is still relatively immature compared to Australia’s other capital cities. The market is still dominated by university operated accommodation, with only seven commercially operated PBSA locations in the city.

JLL views the reason for this being the expansive nature of WA and the distance between universities therefore making it difficult to determine the best location for PBSA.

JLL estimates that there are currently around 4,903 available beds catering to close to 79,000 full time students. This represents a market penetration rate of 6.2%. The low penetration rate combined with the modest pipeline means that Perth stands out as potentially the greatest opportunity for market expansion of PBSA nationally.

The Curtin University Campus Development Opportunity currently being offered to the market is likely to deliver additional on campus student accommodation and we expect to see off campus PBSA activity begin to occur during 2017.

Canberra Market OverviewThe Canberra PBSA market has been very active in 2016, with ANU continuing to expand its bed supply. The university recently announced a major redevelopment of Bruce Hall with more than 800 students scheduled to move into twin towers in 2019. This comes on top of a current 500 bed development currently under construction.

JLL estimates that around 31.4% of full time students studying in Canberra are currently residing within PBSA. This is easily the highest market penetration rate nationally and possibly provides an indication of the extent of demand possible in other cities, particularly amongst overseas students.


Total Adelaide Development Pipeline

800

600

700

500

400

300

200

100

02017 2018 2019 2020


Source: New Zealand Ministry of Education

New Zealand has experienced steady growth in overseas students since 2008. In 2015 the country hosted 19,695 full time equivalent overseas students, with average growth of 460 students per annum over this period.

Auckland’s two major universities, the University of Auckland and Auckland University of Technology are the most popular destinations for overseas students followed closely by Massey University although the latter’s overseas student population is distributed amongst its various campuses around the country.

Of the various tertiary destinations in New Zealand, Auckland has been the major growth market, accounting for 74% of the growth in international students since 2008. This growth has supported the ongoing growth of the Auckland PBSA market, which has added over 1,500 beds in the last two years.

New Zealand Market Overview05

JLL estimates there are currently 7,017 PBSA beds in Auckland. With 56,700 full time students studying in Auckland, this equates to a market penetration rate of 12.4% which is comparable to Australia’s major capital cities.

The best current examples of PBSA in Auckland are the UniLodge development at Whitaker Place which opened in 2016 and The UniLodge Symonds Street development due for completion and opening in 2017.

Total New Zealand Full Time Overseas Students


International Student Study Location - 2015

Source: New Zealand Ministry of Education

AucklandDunedinWellingtonPalmerston NorthHamiltonChristchurchOther

45%

10%

17%

7%

7%

11%3%

03,0006,0009,000

12,000

21,000

15,00018,000

2008 2009 2010 2011 2012 2013 2014 2015






56,694

7,017

31.9%

8.6%

12.4%

Auckland Total


BlueSky l La Trobe Street

Total Beds Owned Pipeline Total

CLV 9,734 0 9,734

Urbanest 4,061 2,572 6,633

Scape 0 5,593 5,593

Blue Sky 286 2,960 3,246

Iglu 1,364 964 2,328

Student One 687 1,701 2,388

Living + Learning Partners 1,906 0 1,906

Frasers 1,041 0 1,041

The student accommodation market during 2016 has gained further momentum as an investment grade asset class evidenced through the level and type of capital that has been invested in the PBSA sector. This interest has been encouraged by various state and local governments who are looking to encourage investment and further diversify their economies.

Key activities of 2016 have been as follows: • High level of site acquisitions across Melbourne and Brisbane with Sydney only being restrained by the

lack of suitable sites rather than a lack of demand for this location.

• Transactional activity during 2016 has included the sale of Whitley College Melbourne, UniLodge Kensington, (subject to a lease with UNSW) and the ANU 30 year concession agreement transaction.

• There have been various off market opportunities during 2016 and we expect to see results on these opportunities close out in the first quarter 2017 which will provide the long awaited evidence of yield tightening in the sector.

• The CLV portfolio has been brought to the market in 2016 and is a major global investment opportunity. Whilst this will gain full momentum during 2017 it has created a flurry of activity during the second half of 2016 as various groups have commenced working on the first phase.

• The 2016 year has been characterised by the existing players in the sector expanding their pipeline through site acquisitions. In addition there have been some new entrants to the sector, although the opportunities are more limited for new entrants given the strong expansion phase that existing players are currently in.

• The softening of the inner city residential markets has begun to result in the delivery of opportunities for student accommodation operators to acquire development sites that were previously planned for residential apartment development.

• The top 8 owner/operators of 2016 are summarised in the following table. This analysis is based on ownership only and exludes operators who just manage assets.

Market Activity and Outlook06


Australian PBSA Yields + Risk Premium

Major PBSA Ownership and Bed Pipeline

Yield compression across the PBSA sector has been a major talking point of 2016. The past five years has seen a trend of falling cash rates and 10 year bond rates. The graph below shows the average PBSA yield as compared to the 10 year bond rate and cash rate to demonstrate the indicated risk premium being attributed to the PBSA sector:

Some transactions of 2016 have been subject to a university lease rather than direct let PBSA. We have included these transactions in the yield analysis as they are still a good indicator of the current market sentiment in relation to student accommodation assets. JLL estimates that 2017 will provide further evidence which will place PBSA assets in a yield range of 6.25% - 7.25%.

Outlook for 2017:• Yield compression will be evidenced through the settlement of off market opportunities that are expected

to close out in the first quarter of 2017.

• Continued on campus activity driven by various universities seeking to partner with the private sector in relation to delivery of required facilities including student accommodation.

• We expect to see the first site acquisitions in Perth for PBSA development. Our view is that it is likely these sites will be CBD or fringe based rather than located next to a university.

• The CLV portfolio offering will be a major global transaction during the course of 2017, this includes significant assets across Australia and New Zealand in addition to US and UK assets.

• Regional PBSA activity is expected to become a greater focus of operators as they continue to seek ways to deploy capital and grow pipelines.

• Some developer/operators will begin to explore broader Asia Pacific opportunities in countries that feature the right underlying characteristics to support PBSA development.

• Interest in PBSA development in the Auckland market will be strengthened through the success of the Whitaker Place and Symonds Street developments.

• Further new capital is expected to be invested in the PBSA market during the course of 2017.

• We generally expect to see further sales of development sites with residential DA’s being transacted to student accommodation developer/operators.

0%2012 2013 2014 2015 2016Y

2%

1%

4%

3%

6%

5%

7%

9%

8%

2011

10 year Bond Rate Indicated Risk PremiumPBSA Yields (average) Cash Rate


Urbanest l City Road

WebpageAustralian Student Accommodation Market Review Update 2016Globally, Australia leads the way with international students now accounting for more than a quarter of all higher education enrolments. In response to the opportunities available, the student accommodation sector is expanding rapidly and the number of international players eyeing the market is growing.This Report Includes:Higher Education: Australia’s Universities Are Well Regarded Internationally But Several Are Leading The Pack When It Comes To Student Growth.Supply & Demand: The Competition Amongst Accommodation Operators For Students Is Heating Up Across The CountryMarket Activity: The Only Thing Greater Than The Increasing Number Of Global Investors In The Market Are Their Ambitions.From Fringe to Mainstream Student accommodation is being increasing viewed as a viable asset class by a range of major international investors

Noral Wild Regional Director Head of Social Infrastructure - Australia M: +61 409 439 991 [email protected]

David Larkin Associate Director Social Infrastucture - Australia M: +61 422 443 461 [email protected]

www.jll.com.au/studentaccommodation

Jones Lang LaSalle© 2016 Jones Lang LaSalle IP, Inc. All rights reserved. All information contained herein is from sources deemed reliable; however, no representation or warranty is made to the accuracy thereof.

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Australian Student Accommodation Market Review - JLL AU Student... · Iglu | Franklin Street Source: Australian Government Department of Education & Training (uCube) Australian &