UK providers muscle in on Queensland student market
UK-based student accommodation provider Scape Living is making up for lost time as it targets Queensland’s booming education market.
Originally based in London, the company has purchased a site in Toowong, 5km west of the Brisbane CDB, for $13.5 million, with plans to build its second student accommodation project in Brisbane, subject to council approval.
The sale of the Toowong site is also a coup for the previous owner Ross McKinnon, founder of State Development Corporation, who has more than doubled his money after purchasing the site for $5.5 million in late 2013.
Hunter Higgins, director of investment services at Colliers International, says: “The vendor originally bought the property to lease the office space in the short term, with a potential to develop in the long term.”
“This is an outstanding result for them considering the value has more than doubled in three years.”
The prominent 1945sqm site at 611 Coronation Drive has a 37m frontage to the suburb’s main thoroughfare, which is also one of Brisbane’s busiest CBD connection roads.
The site has development approval for a 15-storey residential apartment project, which Scape Living plans to convert to student accommodation.
Scape Living currently has another $160 million student housing facility under construction after acquiring and amalgamating two sites at Southbank.
In the last 18 months nine major sites have been sold to student accommodation operators in Brisbane, totalling nearly $190 million
“The market for development sites in Brisbane is still active, and as we have seen in this case, there is potential for alternative uses other than residential developments,” Colliers International associate director of residential Brendan Hogan says.
“In the last 18 months nine major sites have been sold to student accommodation operators in Brisbane, totalling nearly $190 million.”
“Their attention has turned to Toowong due to a range of the educational facilities in the immediate area, most importantly the University of Queensland at St Lucia.”
Brisbane City Council has been proactively looking to capitalise on the booming education market and has reduced infrastructure charges for new student accommodation developments by up to 80% in a bid to attract new development.
In Brisbane from 2006 to 2013 there were 194 rooms in purpose-built student accommodation developments completed, while simultaneously student enrolments increased by about 32,000 students.
But CBRE research analyst Tom Broderick says developers are slowly catching up.
“Since infrastructure contributions have been reduced there has been a significant increase in development applications lodged, with almost 4500 rooms applied for in 2015 alone,” Broderick says.