Global Student Accommodation expands further in Australia

GSA continues to build accommodation for over 700 students with a massive investment in Australia

Global Student Accommodation (GSA) announced recently that it is proceeding with its plans to expand in Australia despite the pandemic situation.

GSA plans to deliver a £110m development at the North Terrace in Adelaide, Australia dubbed to be the largest investment in the country’s purpose-built student accommodation(PBSA) sector this year. The company said that this move is a great chance to gain the advantage of a “first mover” in a high growth market. The new PBSA scheme will provide 725 beds and will be in Adelaide’s CBD.

“Australia continues to remain one of the strongest regions for prime student accommodation across mature and emerging markets, and the Australian portfolio is, therefore, well-positioned to deliver strong investor returns as a result of its first-mover advantage,” GSA Group chairman Nicholas Porter said.

Right now, however, the student accommodation market in Australia has shown a significant contraction in annual income growth. Savills research indicates that during the last three months the student accommodation sector has recorded the smallest growth rate since 2013.

Furthermore, the state of PBSA in Australia has been affected by the closure of international borders, which has led to most providers struggling with declining occupancy rates of 20-50%. Just a few months ago, before the pandemic, student accommodation providers were expecting unheard of occupancies for 2020.

Backed by its investors, however, GSA plans to move ahead with the new scheme and grow the number of its students to 250,000 by 2025.

Looking at the portfolio of Global Student Accommodation, the company operates facilities in eight countries. In Australia, GSA has four student facilities so far located in Melbourne and Perth with a total of 2,127 beds. The provider of purpose-built student accommodation finished its latest venture, The Boulevard in Perth with 573 beds, last February. The planned development in Adelaide will be GSA’s fifth on the continent.

To deliver the new PBSA scheme in Adelaide, the company has reached out to Synergy Construct, an Adelaide-based contractor. As far as debt funding goes, it will come from the Commonwealth Bank.

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