Student accommodation opportunities grow after Melbourne and Sydney named top education destinations

New research revealed in CBRE’s fifth annual Global Living Report has revealed the top ten most desirable cities for internationally mobile students, with Melbourne and Sydney both featuring in the list.

Paris and New York took out the top places, however Melbourne secured third and Sydney ranked sixth. This is good news for Australia as the report also indicated that global students - particularly those from Asia Pacific - are becoming increasingly mobile.

CBRE have reported on the flow-on effect witnessed in the investment market, with increased interest in student housing as international enrolment numbers continue to grow and investors consider higher yielding property asset classes.

“With commercial property yields at all-time lows in traditional real estate sectors, investors are increasingly looking elsewhere for return. This, coupled with growing student demand, has led to rising interest in the purpose-built student housing sector,” Rosie Young, Director, CBRE Hotels/Student Accommodation commented.

“This was reinforced by CBRE’s recent Global Investor Intentions survey, where 9% of investors identified student accommodation as the most attractive alternative real estate sector, up from 4% the previous year. This represented the biggest increase after data centres.”

With a slowdown in the residential market, has resulted in an increase in the viability of other sectors such as student accommodation. Currently the pipeline of activity between 2019 and 2023 will see an additional 18,000 beds brought delivered across 51 separate projects. Melbourne accounts for 44% of this activity, with Sydney only accounting for around 5%.

“While the Australian student accommodation sector is still in the development phase, commercial operators such as Urbanest, Scape, Iglu and the Student Housing Company are expanding in the market and transaction activity is expected to increase amid a general slowdown in the residential market and as yields in the mainstream commercial property sectors approach new lows,” Ms Young added.

The number of students worldwide is in steady growth – with Asia dominating the figures – and with that, international mobility of students is also increasing. Since 1975, the number of students enrolled for higher education outside their country of citizenship has grown nearly six-fold, with the latest UNESCO figures suggesting there are currently over five million internationally mobile students worldwide.