Blackstone Buys Australia’s Student One for $322M

Blackstone has purchased Brisbane-based Student One for more than A$500 million ($322 million), according to sources, marking the US private equity giant’s first student accommodation investment in Australia and in the broader Asia Pacific region.

The acquisition comprises three premium student housing assets with a total of 2,300 beds in Brisbane’s central business district and a 40-person integrated management company, a Blackstone spokesperson confirmed to Mingtiandi. The Manhattan-based firm aims to capitalise on a shortage of traditional on-campus accommodation in the Queensland capital, where universities house only 5 percent of students.

“We see strong fundamentals in Australia for student accommodation — the country is one of the top destinations around the world for international students,” the spokesperson said.

The deal enlarges a Blackstone student housing portfolio that already features American Campus Communities in the US and iQ Student Accommodation in Britain, reflecting the firm’s global thematic approach of buying high-quality student accommodation assets in locations with strong underlying fundamentals.

Campus Cluster

The three Student One properties on Adelaide Street, Elizabeth Street and Wharf Street serve enrollees at a cluster of colleges and universities in and around a bend of the Brisbane River in Australia’s third-largest city. Property consultancy JLL is understood to have advised on this latest transaction.

The housing is within a 10-minute walk of Brisbane CBD schools and a 30-minute commute to the University of Queensland campus. The properties provide a 24-hour concierge, pool, gym, dedicated study areas, barbecue area, and dining and laundry facilities.

Education is Australia’s largest non-resources export, and the country is a top-four destination for international students alongside the US, the UK and Canada. Factors working in Australia’s favour include relative affordability compared with America and Britain and a strong post-COVID rebound with student visa grants up 42 percent versus pre-pandemic levels, Blackstone said.

In August 2022, funds managed by Blackstone — including flagship property vehicle BREIT — acquired American Campus Communities, the largest developer, owner and manager of student housing communities in the US, for $12.8 billion (including assumption of debt). Two years earlier, the firm led by co-founder, chairman and CEO Stephen Schwarzman had snapped up iQ Student Accommodation for £4.7 billion (now $5.9 million) in what was the largest private real estate transaction in the UK at the time.

Crowding Into Beds

Global fund management titans continue to explore an Australian student housing market dominated by a division of UK-based Scape, whose Scape Core Program holds the largest portfolio of student accommodation Down Under with 13,000 beds across 27 properties.

Singapore-based Centurion Properties has applied to build a 732-unit student housing complex in Sydney for A$132.17 million to serve growing demand generated by a wave of returning overseas students.

Last year, Singapore sovereign fund GIC acquired a 49 percent stake in a seven-asset student housing portfolio spread across Sydney, Melbourne, Brisbane, Adelaide and Canberra for A$567.9 million, while Canadian investment giant Brookfield entered the country’s student accommodation market with its first development project in Melbourne.