In their absence, the occupancy rate of Scape’s 12,500 bed portfolio fell to an average of around 25% nationwide: 17% in Victoria, 25% in New South Wales and 35% in South Australia and Queensland.
“If we don’t bring the students back by December, we expect the occupancy rate of the entire portfolio to drop to 10-15%,” Carracher said.
But he remains optimistic. âThey will come back and the underlying economics remain overwhelming on the demand side.
âThe residential product has been widely rented nationally now, so the main competition that 90% of students have to go to is closed.
âHost family is no longer a safe option for anyone. Demand is therefore up, up, up and supply is unable to keep up. “
The acquisition, subject to the approval of the Foreign Investment Review Board, was completed by Scape’s Basic Student Housing Program.
Financial partners include Allianz Real Estate, AXA Investment Managers – Real Assets, APG Asset Management, Bouwinvest and the founders of Scape.
UTS vice-chancellor Attila Brungs said as part of the deal, current residents are guaranteed occupancy. UTS students will have priority rights and concessions in these residences and other Scape locations.
“We believe our students will be treated well, Scape having generously offered 10 annual scholarships to UTS students over the next four years, which will provide a 50% reduction in accommodation costs at Scape residences,” said Professor Brungs.
“It will also help the university cope with the financial challenges brought on by the global pandemic in a way that does not impact our core teaching and research activity.”