Canadian investment manager Brookfield has entered the Australian student housing sector after forming a joint venture with Citiplan to buy a student housing development site in Melbourne.
The purpose-built student housing development site is located opposite the University of Melbourne.
The duo plan to build a platform of purpose-built student accommodation assets in gateway locations around Australia and New Zealand that will be managed by Journal Student Living.
The JV will build on Brookfield’s US$7.4 billion global student accommodation business, with 197 assets comprising more than 55,000 beds across Europe and the United States.
“The thematics driving student housing are strong as we move into a post-COVID environment,” Brookfield Head of Real Estate Investments Ruban Kaneshamoorthy said.
“There has been significant growth in international student enrolments over the past 10 years, driven by a burgeoning Asian middle class who view Australia as an attractive studying location, and we expect growth to rebound in the coming years.”
Kaneshamoorthy said Australia had the second-highest number of enrolled international students globally in 2019, with limited high-quality purpose-built student accommodation in Australia’s capital cities relative to other global education hubs.
“Given the headwinds the sector has faced through COVID-19, we see this as a highly favourable environment to aggregate sites that will only be delivered once the market has normalised,” Kaneshamoorthy said.
The student housing deal is Brookfield’s latest transaction into alternative real estate assets in Australia after it acquired senior living business Aveo in 2019.
Last year was an extremely challenging year for PBSA operators with the continued closure of the Australian and state borders, according to Savills research.
The COVID pandemic kept international students out of the country, in addition to extended lockdowns in Sydney and Melbourne causing operational challenges with staffing and resources.
However, Savills said there was optimism throughout the sector in 2022 with international students being welcomed back into the country.
Late last year, operators and aggregators reported a significant increase in the level of enquiry and booking rates were strong with some operators reporting 50% booking rates in early December 2021.