THE PROPERTY DEVELOPMENT REVIEW
Based on your conversations with clients, what are the benefits of investing in alternatives & to what extent has the more defensive income profile & stable nature (portfolio hedging) of these assets been a drawcard, particularly for new investors. From an Australian perspective, alternative real estate assets are still relatively new to the market with a significant amount of maturity to come - what do you see is this sectors’ long- term growth potential. Driven by that strong demand for higher education, international student numbers are expected to surge through the rest of this decade and beyond. The analysis (produced in 2023 by HolonIQ) noted the rapid expansion of populations in Asia and Africa. Both continents are expected to account for a greater share of the world’s population as we move towards the end of this century. Asia and Africa are projected to account for approximately 80% of the total global population somewhere between 2060 and 2070. Those overarching trends have helped to inform a further projection from HolonIQ that there will be an additional one billion post-secondary graduates added through 2050, three in four of whom will come from either Asia or Africa. The analysis concludes that many students will be seeking an English-taught degree or qualification. Roughly half of the top 500 universities worldwide are in the US, UK, Canada, or Australia. These “big four” destinations (US, UK, Australia, and Canada) have collectively held a very steady share of internationally mobile students since 2000 (around 37%). Canada gained the most share in that period, with Australia’s market share of the
“big four’s” international student market rising from 15% to 20% between 2015 and 2020. With growth in mobile international students, Australia will remain competitive, and there will be a further requirement for new student accommodation. Clearly, substantial demographic shifts are occurring throughout Australia including an ageing population, shifts in work patterns, greater requirements for cloud computing & demand for different types of rental accommodation - what’s your sense as to how these shifts (and others) are stimulating growth. Institutional property groups have generated a significant amount of activity within the alternative real estate sector to-date, where do you anticipate the opportunities exist for private investors to begin building their exposure / portfolios to alternatives. We anticipate that there will be more development activity with a number of groups seeking to launch PBSA development projects this year. However, in a market with prolonging feasibility challenges, we anticipate different routes to market to emerge than been seen in recent times, such as repurposing commercial office buildings, or modular construction.
July / August 2024 – 25
Powered by FlippingBook