The student accommodation market in Brisbane is in the middle of a massive transition which is to see the sector go from strength to strength in the next 4-6 years. By 2020, forecasters have predicted that Australia will be a major international player in the sector as many of the leading global investors, developers and operators look to take advantage of the highly profitable growth in the student accommodation sphere. Brisbane, Australia’s 3rd largest city has a student population of around 110,000 but with a major undersupply of student accommodation, this has led to overcrowding and high demands for PBSA (Purpose Built Student Accommodation) in the city.
Purpose Built Student Accommodation (PBSA) are complexes which are built solely for students. Tailored with the student always in mind, these buildings are ideally located quite central and close by to universities and colleges were all amenities are easily accessible for the student. Developers are recognising the potential and highly profitable market of PBSA as overcrowding in student cities has become a global issue. Positive results from previous built schemes has seen PBSA offerings continue to grow with a main driver of this growth been the ability to choose a room type as this can accommodate a wide range of student budgets. No longer a standard room, PBSA has various room types which now enables the student to make a selection to facilitate their needs. As student visas issued each year continue to rise, overcrowding in Brisbane has become a modern day issue and has been tackled by the government.
Until recent times PBSA has very much been overlooked in Brisbane which is evident when comparing the city against other student cities in the UK and US. The sector is very much immature, however in recent times Brisbane has welcomed heavy investment in the development of PBSA as several heavyweight players gear up for aggressive expansions into Brisbane. With a careful read of the market investors, developers and student accommodation operators can and continue to thrive in Brisbane, benefitting from fast growth and high profits.
The continuing rise in the number of Erasmus and international students entering Australia every year to study has enabled Brisbane to position itself as Australia’s number one destination to study. With over 75,000 students coming from abroad to study in Brisbane, a massive emphasis has been set on time and quality, making sure Brisbane can accelerate in the student accommodation sector by welcoming the increasing number of PBSA complexes been built. Brisbane’s government has recognised the undersupply of student accommodation and the profitability in attracting more students can have on the city. This recognition has given Brisbane an advantage over other Australian cities with the city now having the most student accommodation beds in the development pipeline.
Brisbane’s lord mayor, Graham Quirk, introduced an incentive to attract international companies and stimulate the growth of PBSA into Brisbane. Mayor Quirk announced a one-time 80% reduction on infrastructure charges over 3 years for student accommodation developments within 4km of the Brisbane CBD. This applies to development applications which have been taken between 1st July 2014 to 30th June 2017. This action has resulted in Brisbane attracting heavy investment whilst stimulating fierce competition amongst large operators, all plugging to become Brisbane’s first truly global student accommodation brand. Some of the major student accommodation operators such as Scape Student Living, UniLodge, Urbanest and Campus Living Villages are all actively looking to have a positive knock on effect in the sector by expanding their portfolio into Brisbane. Since approved the city has seen a wave of experienced international players move into the city transforming the once timid market.
Therefore, in conclusion it is possible to suggest that the effects of the Government’s reduction in infrastructural charges has had a largely positive impact on Brisbane. According to JLL’s Australian Student Accommodation Market update 2015 there is currently a pipeline of 8661 beds to be available to students over the next 5 years. When this is compared with Melbourne (6856) and Sydney (4954) it is possible to state that this is a direct correlation of the governments objectives and of the increasing popularity of Brisbane as a destination for Students. This is in line with the city council’s objective to develop the city as an integrated student hub whilst looking to rapidly expand the supply of student accommodation. Brisbane’s potential as a student destination has not gone unnoticed and as a result there is considerable anticipation and excitement throughout the city however when one considers that Brisbane is a relatively new market it is essentially unknown to a wide variety of the operators and only time will tell if the market is truly quantifiable as an area of positive investment.