South African developer to turn $30m car park into student digs

A South African group has bought a Carlton car park for $30 million.

South African real estate company Redefine Properties is expected to make a major play in Melbourne’s student accommodation market after paying $30 million for a Carlton car park.

The listed property group bought the six-level commercial car park at 16-32 Leicester St and is now understood to be planning a $130 million high-rise student accommodation building with between 600 and 700 beds.

The 2040sqm site had 454 car park bays and was part of a portfolio that included a second, larger car park and site at 380 Queen St.

The Queen St site is still for sale with an expected asking price of $80 million.

There is strong demand by international and local students for new high quality student accommodation facilities

Colliers International’s Matt Stagg, Daniel Wolman and Oliver Hay brokered the deal between the Carlton car park’s owner and Redefine Industries, with Stagg saying developer interest in student accommodation has never been higher.

“The past 18 months has seen an influx of major international student accommodation groups buying up key sites between RMIT University and Melbourne University,” Stagg says.

“Melbourne is widely regarded as Australia’s education capital. It has world class universities and private schools as well as a cosmopolitan lifestyle that is a major drawcard for international and interstate students.”

Realcommercial.com.au last year reported that a waning overseas student housing market and a dearth of local beds would prompt a stampede of developers attempting to gain a foothold in student accommodation.

The Carlton car park fetched $30 million from a South African investment group.

The Carlton car park fetched $30 million from a South African investment group.

A Savills report highlighted the intense shortage of beds, with just one for every 7.5 international students currently enrolled in Australian universities.

While there are 20,000 beds expected to be added to the local market by 2018, that will bring the national total to 94,000 beds, which still falls dramatically short of requirements, paving the way for an influx of investors.

Wolman says the demand for student accomodation is expected to intensify.

“Private education groups such as Melbourne Institute of Technology and Haileybury College have also made major investments in Melbourne CBD and city fringe campuses,” he says.

The past 18 months has seen an influx of major international student accommodation groups buying up key sites between RMIT University and Melbourne University

“Therefore, there is strong demand by international and local students for new high quality student accommodation facilities to be constructed within close proximity of these universities and schools.”

The other car park in the portfolio is yet to be sold, but is being touted as a likely high-rise residential apartments development site.

“The car park at 380 Queen St is in advanced negotiations with major developers and car park investors,” Hay says.

“The Queen St car park is situated on the corner of A’Beckett Street and is one of the largest remaining undeveloped landholdings in the Melbourne CBD. There is a scheme by COX Architects for a 71-level tower.”