The development division of a private equity company has purchased two inner-Brisbane building sites with the aim of addressing what it describes as “an undersupply of student accommodation in the city”.
Blue Sky Private Real Estate has announced its purchase of two development sites in South Bank and Woolloongabba, with the aim of developing more than 1,000 purpose-built student rooms worth $160 million.
Blue Sky Private Real Estate is a division of Blue Sky, a listed private equity group.
Once completed, the two buildings will be managed by student accommodation operator The Pad, with the mix of accommodation to be marketed to both domestic and international students.
Adam Vaggelas, director of Blue Sky Private Real Estate, explained that the company had identified the student accommodation sector as a key component of what it terms its “social real estate and infrastructure strategy”.
“Valuations are steeply increasing in core commercial assets over recent times as a result of increased domestic and offshore capital flows,” Mr Vaggelas said. “We have broadened our focus on social real estate and infrastructure opportunities in an endeavour to enhance investor returns by participating in this growth sector.
“We believe the macro drivers of the education and tertiary learning sector in Australia are compelling, given the quality of our domestic university system and the country’s proximity to a rapidly expanding Asian middle class.”
Construction is scheduled to start on the 286-bed Woolloongabba facility within the next month, with the 733-bed building at South Bank scheduled for commencement in October.
The company has indicated it is actively pursuing additional development sites for similar projects.