March 1, 2015 A joint venture to develop student accommodation in Australia has been proposed by APG, the largest pension fund asset manager in The Netherlands, and developer Scape Student Living from the UK. A huge commitment of $220 million has been pledged for the project which would see the partners own and manage the accommodation.
If the plan unfolds as proposed, the Australian student accommodation will be a replica of similar Scape projects in the UK, focusing on the luxury high-end market. The Scape student housing portfolio has expanded dramatically in recent years, and includes GCP Student Living, a real estate investment trust that is dedicated solely to student accommodation.
Scape executive chairman, Nigel Taee, believes there is a market in Australia for his product.
â€œWe strongly believe that our design and service philosophy will energise a neglected market and give students a real choice for the first time.â€_x009d_ Mr Taee said.
The partnership has already established a foothold in Melbourne with the acquisition of land close to RMIT University. Plans are going ahead to construct accommodation to house 1500 students by 2018. The joint venture ultimately hopes to own and manage 5000 beds in 5 Australian states and territories.
Student housing a sound investment
The strategic venture partners expect underlying fundamentals will provide long-term investment returns on the project. APG Asia Pacific head of private real estate investments, Sachin Doshi, is confident international students from well-heeled backgrounds will gladly take the opportunity to reside in luxury student housing.
â€œWith tertiary education being a key anchor of Australiaâ€™s economy, continued growth of international students from Asia and a chronic shortage of purpose built student accommodation, we strongly believe that the sector provides superior risk-adjusted returns potential,â€_x009d_ Doshi said.
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