News - 3rd March 2016 - (The Australian)
One of South Africa’s largest real estate investment trusts is considering investing more than $100 million into Australia’s student accommodation sector.
Redefine Properties, with a portfolio worth more than $5 billion, is looking at a $130m student accommodation project in Melbourne, according to its chairman Marc Wainer.
The REIT already has a significant exposure to Australian commercial property through its 25.6 per cent stake in the listed Cromwell Property Group.
Mr Wainer, speaking to investors after Redefine’s half-year results this week, said there were a lot of opportunities “but few excite us”. “(But) we are excited about the Melbourne area in terms of student accommodation,” he said.
Redefine owns a controlling stake in South Africa’s Respublica Student Accommodation, through which it may make the Australian investment.
The company has previously flagged its intention to expand its overseas exposure from about 17 per cent of total asset value last year to about 25 per cent.
It agreed this month to take a majority stake in Echo Prime Properties, a Polish real estate company, at a cost of €362m ($544m), funded through the sale of convertible bonds.
The Redefine move comes as British outfit GSA Group makes its first acquisition in Melbourne, outlaying $21m for Campus Estates one week after announcing its re-entry into the Australian market after a short absence.
That deal includes a 350-bed development in inner-city Carlton and it has other projects in the pipeline.
Campus Estates founder Jon Whittle will join the GSA team as head of real estate for Australia with responsibility for acquisitions and strategic direction.
The Carlton site is adjacent to the University of Melbourne on the corner of Pelham Street and Barry Street.
“We are delighted with the acquisition as it will fast-track our re-emergence into the student market,” GSA Asia-Pacific managing director Simon Loveridge said.
Craig Oliver, who previously headed Macquarie University’s campus experience division, has been named as the company’s commercial director.
GSA controls 60,000 beds around the world, with a portfolio valued at $US7.5 billion ($10.38bn).
The student accommodation sector is expected to boom in coming years as more international students head to major metropolitan areas.
International education is Australia’s third largest export industry after iron ore and coal, being valued at $19.2bn a year. There were 640,000 international students in Australia last year, including 272,000 at the higher education level.GSA, which created the successful Urbanest student accommodation brand before selling it last year, has its sights on sites in Sydney, Melbourne, Brisbane and Adelaide.