‘Overwhelming’ demand drives student accommodation market

The developer has fully leased the 500 studios that are already built in its 393 Swanston Street project, while a further 250 beds will soon be available for mid-year occupancy.

“People were moving into the building before we’d finished building,” Scape director Craig Carracher says, adding that 400 students moved in at the start of the academic year in February and the rest moved in this month.

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Challenges with both the residential rental market and the homestay model are driving demand for purpose-built student accommodation, he says.

“The amount of time it takes to hunt down an apartment in the CBD or near to the academic institutions is considerable because they have to turn up to 10 to 20 advertised open days in the hope that they’ll find one that’s available and appropriate,” he says.

“So there’s a huge amount of time that’s wasted by students looking for accommodation.”

An artist’s impression of the new Scape Student Living building at 393 Swanston St.

Landlords are often hesitant to rent to students, who typically don’t have credit ratings and need parental guarantees, he says.

Homestay accommodation can also be a challenge for students who have to integrate with the host family, he says.

Other student accommodation groups have also been active in the city, with South Africa’s Redefine Properties buying the former CFMEU headquarters last year and earlier snapping up a carpark in Carlton, while GSA bought the University of Melbourne’s Whitley College.

Scape has another 10 projects across Melbourne, Sydney and Brisbane with 5500 units under construction and in planning and last year unveiled its Scape South Bank project in Brisbane, which houses close to ­800 students.

The group has backing from local and offshore lenders and also operates 3000 bedrooms in London.

Craig Carracher, executive director of Scape Student Living.

Scape’s new Swanston St tower is 145m tall — which the group says makes it the world’s tallest student accommodation building — with 45 floors across 25,000sqm opposite RMIT and near the University of Melbourne.

Each single-occupancy studio has a double bed, kitchenette, private ensuite and study, with standard studios advertised from $449 a week.

The building includes a gym, shared kitchen and dining facilities, a cinema, lounge, study space and 24-hour concierge ­service.

The group is also planning to open 31 short-term rental units on its top five floors designed for recent graduates, visiting academics and parents of students.

Scape Australia managing director Stephen Gaitanos says the project will help alleviate rental stress.

This article originally appeared on www.theaustralian.com.au/property.