Australia's student accommodation industry a rapidly growing opportunity: Savills

International student visa numbers are continuing to rise at double digit growth levels and because of this PBSA (Purpose Built Student Accommodation) is a rapidly growing industry, according to the latest Savills report on student accomodation.

The report found there are 76,201 beds of PBSA in the eight Australian capital cities, however the existing supply in each city is less than 12% of the full-time student population with the exception of Canberra (27.2%).

Over the first three quarters of 2018, the key focus for the major developers in this sector has been the continued acquisition of sites and the construction and delivery of new PBSA.

Sydney currently has a total development pipeline of 4,787 beds (2.2% full-time students) expected to be delivered over the next four years, of which circa 41% is proposed by universities.

Melbourne has the largest development pipeline of 16,137 beds (5.5% full-time students), which is a quite significant increase compared to 12 months ago.

However, the Melbourne market is underpinned by a strong demand for accommodation, with new schemes trading well.

Melbourne’s universities are active in developing their accommodation, with several projects contributing to just over 25% of the proposed pipeline.

The pipeline of new PBSA projects in Brisbane has slowed somewhat in the past 12 months, following an extremely busy period over the 18 months prior, backed by the positive initiatives of Brisbane City Council.

Brisbane’s development pipeline is currently 6,865 beds (4.8% of full-time students).

There are some concerns Student One, 363 Adelaide St, Brisbane (pictured above) regarding the potential uptake of new PBSA being delivered into the market in the short to medium term, as there is also an increasing pipeline of residential apartments being delivered in the city in the same timeframe.

A number of new PBSA projects have entered the development pipeline in Adelaide, predominantly focused towards the northern end of the CBD and North Terrace.

Recently completed schemes are trading with good occupancy levels.

Currently there is no direct-let accommodation in Perth.

It is also a market that has witnessed a new phase of development, with a number of direct-let projects being promoted in the past 12 months.