This article is from the Australian Property Journal archive
WHILST Australia continues to create uncertainty for investors with debate over “deep cuts” to international students, the nation’s largest superannuation fund, AustralianSuper, is gearing up to launch into the burgeoning student accommodation sector in the United Kingdom.
According to Green Street News, reported that AustralianSuper is close to buying a GBP120 million development project in Bristol.
Located at 40-46 Albert Road, on the banks of the River Avon, the 450-bed project will occupy a former industrial site, which is owned by developer Avon Capital Estates.
In June this year, Avon secured planning approval to convert the industrial site into a PBSA project.
The site is almost adjacent to the University of Bristol’s GBP500 million Temple Quarter Enterprise Campus development, which is proposing to deliver 454 beds as well as 11,000 sqft of commercial space.
According to Green Street News, student stalwart Tim Butler, who set up what would become Student Roost, is working with AustralianSuper to create a purpose-built student accommodation platform, which will be called Abode.
They are looking at multiple locations across the UK.
AustralianSuper’s decision to enter the Bristol market comes as no surprise, as the city is one of the most undersupplied student markets in the UK. Bristol has the highest student-to-bed ratios among Russell Group cities at 2.9:1, and the third highest in the UK.
It is also part of the fund’s strategy to diversify its property exposure in the UK, where it intends to invest GBP8 billion by 2030, with substantial interests in King’s Cross Central (74%) and the Canada Waters (50%) regeneration project.
Australian Property Journal reached out to AustralianSuper, however the fund’s spokesperson declined to comment on the Bristol transaction.
Meanwhile the AustralianSuper’s entry into the UK student housing market comes as political debate heats up in Australia around cutting international numbers.
Compared to the UK, Australia’s PBSA sector is heavily undersupplied due to decades of poor planning.
For comparison, Australia has only 132,700 beds in operation with 1.6 million students, whereas the UK market which has 1.3 million students, and there are over 700,000 PBSA beds.
Despite this, the government and opposition want to cut international student numbers as part of their policies to fix the housing crisis.
However the Student Accommodation Council’s report, Beyond the Visa Cap: Why Restricting International Students Won’t Solve Australia’s Housing Crisis, show the country’s 725,000 international students make up 5.4% of the rental market – and that capping their numbers will only reduce this figure by 0.6% by 2026, and have little impact on rental availability.
Furthermore, it would have the unintended consequences of driving away investors who are looking to invest and create supply in the market, putting Australia back to square one.
