blog

student accommodation

The demographic shift in Newcastle presents big opportunitiesjon_webber

The construction industry, like many industries, is full of upturns and downturns depending on trends.  Right now, here in Newcastle, there is a social trend that is presenting an interesting opportunity to businesses, developers and the construction industry.  The question is: how can we take advantage of it?

The opportunity

There are around 44,000 students enrolled in either TAFE of the University of Newcastle – and they all need somewhere to live.  At the moment, the demand for this accommodation and the expectations of students are shifting and there are a few reasons why.

On-campus accommodation at the University of Newcastle’s Callaghan campus offers around 1,800 beds, meaning much of the demand is being met by the ad-hoc student housing market nearby.  In early 2015 the University will open its new college introducing 778 beds onto the Callagham campus, reducing demand around Callaghan.

The university is also in the design phase of establishing a second campus, NeW Space in the city.  Adjacent to the University’s existing Nesca House, this new building will house the law and business faculties and is expected to have an intake of 3,800 students in the first year and 4,500 in the second.  This creates a demographic shift, bringing students from the suburbs into the city despite little availability of purpose-built student accommodation.

This is the first time we have discussed the student accommodation market in Newcastle and, whilst there are differing sizes of accommodation providers, the leaders in the field are often larger commercial student accommodation companies and it’s their precedents which seem to be setting the trends in design.  Providers like UniLodge, Iglu, Sleeping with the Enemy, and Urbanest provide a good guide into this relatively new market opportunity.

What is already being done?
In Newcastle city, there are several multi-residential accommodation facilities underway that may be available to students.  Some of the bigger projects include the following:
– Arena Apartments: 150 Apartments, $100m
– Tattersall’s Apartments: 53 Apartments, $27m
– Icon Central: 262 Apartments, $100m
– Beresford St Apartments: 100+ Apartments, $60m
– Nest: 26 Room Boarding House, $3.3m
– 272 Darby St: 17 Units, $2.6m
– Life on Throsby: 40 Dwellings, $20m
– Spire Apartments: 150 Apartments, $50m

Evidently, there is a lot of residential activity in progress, but little of it is for the sole purpose of student accommodation, leaving a large opportunity for us.

So in this environment, how do we approach development to make it work?

Our process lies in six key phases…

Phase 1 | Information Gathering – Who are you designing for?
Phase 2 | Precedent Analysis – Who else has done it?
Phase 3 | Maximising Return – Options analysis
Phase 4 | Council – What angle to take
Phase 5 | Pre-DA Preparation for Council -Smoothing the process
Phase 6 | Construction Design – The devil is in the detail

Phase 1 is the most important part of the process – unless you completely understand the market, you won’t find success. In our opinion, some things to remember for the student accommodation market are…

– Management of the properties is critical, as these are not normal leases.  They have special requirements and are very cyclical.
– The market is a mix of different types of people.
– Right now, we’re dealing with Generation Y – the disposable generation.  They like new things but durability isn’t a priority as they throw things away.
– There is a portion of mature age students too and this needs to be considered.
– There is a multicultural mix of people in the market due to international students – they have different lifestyle preferences so versatility is important.
– Location is critical – 400-600m away from the goal destination is the rule of thumb for walking environments.

The student accommodation market presents huge opportunities to anyone in the development and construction industry in Newcastle – you just have to have the right approach and understand the drivers of the market’s demand.

 

Written by Jon Webber and Andrew Barnard 

Posted in General


Comments are closed.

latest posts

categories

archives