In a long-term strategic play, Blackstone, the prominent US private equity powerhouse, has secured a foothold in the burgeoning Australian student accommodation market with its acquisition of Brisbane-based Student One for a sum exceeding AUD $500 million. This significant transaction represents Blackstone’s first foray into student housing investments within Australia and the wider Asia Pacific region.
The official Blackstone position on the acquisition was, “We perceive robust fundamentals in Australia’s student accommodation sector, recognizing the nation as one of the premier global destinations for international students.”
This strategic move augments Blackstone’s rapidly expanding student housing portfolio, including assets such as American Campus Communities in the United States and iQ Student Accommodation in the United Kingdom. This approach mirrors the firm’s overarching global strategy, characterized by acquiring premium student accommodation assets in regions underpinned by robust foundational factors.
The three Student One properties, strategically positioned on Adelaide Street, Elizabeth Street, and Wharf Street, cater to students from a conglomerate of colleges and universities close to the Brisbane River, within Australia’s third-largest city. It is worth noting that property consultancy powerhouse JLL played a pivotal role in advising on this landmark transaction.
These student accommodations, conveniently located within a 10-minute walk from Brisbane’s central business district schools and a mere 30-minute commute to the University of Queensland campus, offer an array of enticing amenities. These include round-the-clock concierge services, a rejuvenating pool, state-of-the-art fitness facilities, dedicated study areas, a popular barbecue area, and dining and practical laundry facilities.
Australia, known for its thriving education sector, boasts the largest non-resources export in education services. The country consistently ranks among the top four global destinations for international students, alongside the United States, the United Kingdom, and Canada. Favourable factors, such as relative affordability compared to the US and UK, combined with a post-COVID resurgence, with student visa grants surging by an impressive 42 per cent compared to pre-pandemic levels, have prompted Blackstone’s keen interest in the Australian market.
The significance of the overseas student market to Australia’s export economy cannot be overstated. It is a cornerstone of the nation’s economic prosperity, serving as a vital source of revenue and contributing substantially to its GDP. The influx of international students injects billions of dollars annually into the Australian economy, encompassing tuition fees, accommodation expenses, and living costs. This economic symbiosis supports numerous jobs across diverse sectors, from education to hospitality, retail, and more.
Australia’s appeal as an educational hub, renowned for its world-class institutions and diverse, multicultural environment, draws students from across the globe. Furthermore, these international scholars foster valuable cultural exchanges and diplomatic ties, enhancing Australia’s global influence and soft power.
In recent years, the international student market has demonstrated its resilience, even amid global challenges like the COVID-19 pandemic. Australia’s proactive measures to ensure the safety and well-being of international students have further solidified its reputation as a premier education destination. As the nation continues to prioritize and invest in its education sector, the overseas student market remains a linchpin in Australia’s economic success, underpinning its status as a global leader in education and export-driven prosperity.
In August 2022, Blackstone’s managed funds, including the flagship property vehicle BREIT, executed the acquisition of American Campus Communities, a pioneering developer, owner, and manager of student housing communities in the United States, for a staggering USD 12.8 billion, encompassing the assumption of debt. Two years prior, the firm, helmed by co-founder, chairman, and CEO Stephen Schwarzman, had orchestrated the acquisition of iQ Student Accommodation for GBP 4.7 billion (now USD 5.9 billion), marking the largest private real estate transaction in the United Kingdom at that time.
As global asset management giants continue to study Australia’s student housing market, the sector remains predominantly dominated by a subsidiary of the UK-based Scape. Scape’s Core Program boasts Australia’s most extensive student accommodation portfolio, comprising a remarkable 13,000 beds dispersed across 27 distinctive properties.
Singapore-based Centurion Properties has demonstrated its commitment to the Australian market by submitting plans for a 732-unit student housing complex in Sydney, an investment valued at AUD 132.17 million. This move is a response to the escalating demand generated by the anticipated return of international students.
In a parallel development, Singapore’s sovereign wealth fund, GIC, procured a 49 per cent stake in a diverse seven-asset student housing portfolio scattered across key Australian cities, including Sydney, Melbourne, Brisbane, Adelaide, and Canberra, for an impressive AUD 567.9 million. Meanwhile, Canadian investment behemoth Brookfield has also entered the Australian student accommodation arena, initiating its maiden development project in Melbourne.
Blackstone’s substantial investment in Student One underscores the immense promise of Australia’s student accommodation sector, with the nation’s allure as a global educational hub.
To return to the home page, click here.