AUSTRALIAN PROPERTY INSIGHTS
CAMPUS QUARTER
WHAT’S IN THE PIPELINE? Australia’s national PBSA pipeline of 21,900 beds overstates what’s actually progressing; over 10,000 beds are under construction today, with the remainder in early feasibility, planning, or approvals. The volume of beds that will be delivered in the next 2 to 3 years is low, particularly in markets already under acute supply pressure. While demand is clearly visible, project conversion challenges exist. Many proposed projects sit with DA approval but no construction contract or funding commitment in place.
This is a result of several factors including zoning complexity, urban infill restrictions, limited site availability, construction costs, debt costs and uncertain valuation exit assumptions. However, the cost of finance is improving with the rate cutting cycle underway and there is appetite from commercial lenders and debt funds to deploy capital. Construction costs, while still high, are stabilising and the policy picture is more certain. This environment should help more schemes move from DA approval to construction. Developers and universities are also exploring solutions – including public-private partnerships and conversions of other property types – but these will take time to bear fruit.
UNDER CONSTRUCTION
2,600 beds SYDNEY
2,000 beds MELBOURNE
1,600 beds PERTH
3,170 beds BRISBANE
675 beds ADELAIDE
CHART 7
NATIONAL PBSA SUPPLY FROM 2016 TO 2030+
0 1000 2000 3000 4000 5000 6000 7000 8000 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028
Completed
Under Construction
Source: Cushman & Wakefield Research
CHART 8
STUDENTS PER BED
4 6 8 10 12 14 16
0 2
Sydney
Melbourne
Brisbane
National
International
Total
Source: Cushman & Wakefield Research
9
CUSHMAN & WAKEFIELD
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