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  • Student accommodation in the spotlight as Melbourne and Sydney are named top education destinations

Student accommodation in the spotlight as Melbourne and Sydney are named top education destinations

Sydney | 1 May 2019
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Melbourne and Sydney have been ranked among the top ten cities for internationally mobile students according to new research released by CBRE.

While Paris and London were the top-ranked cities for international students, CBRE’s fifth annual Global Living report shows that Melbourne and Sydney were ranked 3rd and 6th respectively amid indications that global students - particularly those from Asia Pacific - are becoming increasingly mobile.

This is having a flow-on effect in the investment market, with heightened interest in student housing as international enrolment numbers grow and investors consider higher yielding property asset classes.

Rosie Young, Director, CBRE Hotels/Student Accommodation commented: “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.”

“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.”

Ms Young noted that the slowdown in the residential market had increased the viability of student housing projects and helped fuel investor appetite, with a large pipeline of about 18,000 beds over 51 projects proposed between 2019 and 2023. 

Melbourne accounts for 44% of the pipeline followed by Perth and Brisbane at 15% and 12% respectively, with Sydney the laggard at circa 5%.

Ms Young commented; “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.”

Steady growth in student numbers is a worldwide phenomenon and has increased more than two and a half times over the past twenty years. This reflects both population and economic growth, especially in Asia, with expectations that by 2030 there could be as many as 276 million students worldwide.

Alongside growing student numbers, the 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.

The Asia Pacific region has the most internationally mobile students, with China at the top. Between 2014 and 2015 alone, the number of students from China and India increased by 43,000 and 52,000, respectively. 

The ability to learn or improve English language skills is a pull factor alongside other factors, such as cost of living and lifestyle, which drives the decisions on which city to study in, alongside the quality of education and the potential post-graduate job opportunities. 

CBRE Research Manager Joyce Tiong commented: “It is no coincidence that cities with a high share of international headquarters attract a high share of international students, as highlighted by the fact that Paris, London, and Melbourne all have over 100,000 international students currently studying.”
For Australian/international news or global stories, follow us on Twitter: @cbreaustralia

About CBRE Group, Inc.

CBRE Group, Inc. (NYSE:CBRE), a Fortune 500 and S&P 500 company headquartered in Los Angeles, is the world’s largest commercial real estate services and investment firm (based on 2018 revenue). The company has more than 90,000 employees (excluding affiliates) and serves real estate investors and occupiers through more than 480 offices (excluding affiliates) worldwide. CBRE offers a broad range of integrated services, including facilities, transaction and project management; property management; investment management; appraisal and valuation; property leasing; strategic consulting; property sales; mortgage services and development services. Please visit our website at www.cbre.com.

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