Brookfield Adds Melbourne Project as Third Aussie Student Housing Development

Brookfield Asset Management is taking on its third student housing project in Australia after international student enrolment in the country last year surpassed pre-pandemic peaks by 4 percent.

Brookfield on 4 March lodged a development application with the City of Melbourne to build a 39-storey student housing complex at 100 to 106 Franklin Street in the Victorian state capital, with the project set to add 1,038 beds to the city’s student housing supply.

“The thematics driving student housing in Australia are strong,” Brookfield’s head of real estate investments for Australia Ruban Kaneshamoorthy told Mingtiandi late last week. “There has been significant growth in international student enrolments during the past 10 years, driven by a burgeoning Asian middle class who view Australia as an attractive studying location.”

Government figures show there were nearly 83,000 international student arrivals in Australia during January – up by 29 percent from the same month a year earlier, with rents for student accommodation having risen 27 percent from pre-Covid levels, according to Oxford Economics.

Rental Apartment to Student Housing

The proposed development is located 300 metres east of Queen Victoria Market and less than one kilometre (0.6 miles) away from the University of Melbourne, where Brookfield is developing its first purpose-built student accommodation (PBSA) project, a 400-unit accommodation directly opposite the university’s main campus.

Brookfield’s plans for its latest project also include 24,860 square feet (2,310 square metres) in shared facilities with space dedicated for retail use.

Located on the corner of Franklin Street and Blender Lane, the 18,255 square foot site is occupied by Burbank House, the former headquarters of Aussie builder Burbank, and Association House, previously home to Charles Darwin University.

Brookfield has agreed to acquire the project, which had previously been approved for development of a 40-storey build-to-rent tower, from local developer Landream, with the transaction expected to be completed in the third quarter. Landream had acquired the site for around A$30 million in 2020 with plans to develop build-to-rent apartments.

The site is also 300 metres west of RMIT University and on the next block, the southern portion of the Queen Victoria Markets shopping precinct will undergo a A$1.7-billion redevelopment by Lendlease. When it is completed in 2028 that project is expected to include a 1,100-bed Scape student housing facility.

Supply Gap

Brookfield, which has a $6-billon portfolio of student accommodation globally, is taking on the trio of Aussie student housing projects through a joint venture with Melbourne-based developer Citiplan Property, which will operate the assets under its Journal Student Living brand, according to Kaneshamoorthy.

The Brookfield-Citiplan JV’s maiden project was already granted the go signal last year and is scheduled to be completed in 2025, according to local media. The 15-storey project is located at the corner of Grattan and Bouverie streets in the inner-Melbourne suburb of Carlton.

Last year the partners lodged plans to develop a 31-storey PBSA tower at 240 Margaret Street in Brisbane’s central business district which could deliver 930 beds upon completion in 2026, based on local news reports.

When it first entered Australia’s student housing market in 2022 Brookfield set a goal of establishing an A$500 million portfolio in the sector, focused on key markets including Brisbane, Sydney and potentially Perth.

Home to nine of the 100 top-ranked universities globally, Australia is estimated to have a shortfall of 7,000 student beds each year over the next five years as the pipeline of projects fails to keep pace with student arrivals, according to a JLL report published earlier this month.

In response to rising demand in the sector, Blackstone acquired the 2,300-bed Student One portfolio from Valparaiso Capital last year for A$530 million, giving it three projects in central Brisbane.

In January of this year Singapore’s SLB Development lodged a planning application to develop 420 units of student housing in central Melbourne after acquiring the project site for A$35.5 million in June 2022.