Investor interest sought for RMIT village student accommodation

Diane LeowDecember 7, 2020

A purpose-built student accommodation property in North Melbourne has been listed for sale.

The Jones Lang LaSalle marketing gives a projected net income of $4.6 million for this year. 

RMIT Village, located at 5-17 Flemington Road, can house up to 456 residents in 229 apartments of various configurations. One-bedroom, two-bedroom, three-bedroom, and five-bedroom apartments are available for rent in either 44 or 52-week terms.   

Facilities on site include a gym, pool, study area, games room, bike storage, and a licensed café. It is managed by the Campus Living Villages Fund, which is in turn managed by the Transfield Holdings Group.  

Established in 2007, the Campus Living Villages Fund manages 35,000 beds in Australia, New Zealand, the United Kingdom and the United States as of 12 June this year. Of this, 9,100 beds are located in Australia.  

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The RMIT Village used to be the Old Melbourne Hotel. It is close to Melbourne University and is about 15 minutes away from RMIT.  

The hotel was purchased for $40 million in 2005, and converted into student accommodation by the vendors, Transfield and private developer Tuscan Corporation. The estimated end value of the converted property was $60 million, and the property is expected to attract interest of that value.  

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Jones Lang Lasalle director of student accommodation Conal Newland told Property Observer that the property has been “100% full for the last three years”.  Conal Newland has the property listed with colleague Noral Rich with offers due by August 28.

Newland revealed that 9% of students in Melbourne currently live in purpose-built student accommodation. In comparison, 21% of students in London take up purpose-built student accommodation properties.  

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“All things being equal, there is a significant shortage of purpose-built student accommodation in Melbourne. This is no different to most of the other major Australian cities,” Newland said.  

“This is a unique opportunity – this property is up and running, and there haven’t been many opportunities like this in the market so far,” Newland added.  

Brisbane-based student accommodation provider The Pad, which currently manages 1,500 beds, recently announced expansion plans to Sydney, Melbourne, and Canberra. This follows the backing of investment group Telopea Capital Partners.

Offers close August 28 for the RMIT student accommodation.

A recent report by the Hong Kong and Shanghai Banking Corporation (HSBC) has found that Australia is the most expensive country for international study, surging ahead of the United States and the United Kingdom.

Diane Leow

Diane has spent her entire career in the world of digital. She is passionate about delivering the best content to a world that is becoming increasingly jaded by the news. She also believes in the importance of great journalism and how it can change the world. Oh, she also drinks a lot of coffee.

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