Property Focus: Degree Apartments - Carlton

UniLodge D1 was completed in 2007 and consists of 93 furnished studio apartments. The Architects have created a timeless modern student environment with comfortable common areas, studying areas and great ground floor cafe.

All this is ideally loacated in the University of Melbourne Campus Precinct. Since opening the building has been consistently full and remains one of UniLodges most popular buildings for students in Melbourne.

This building was one of the first to boast 6 Star environmental rating, hence reduced water and energy use - saving money on heating and cooling.

We currently have a couple of properties for sale, ranging from $170,000 - $190,000. Gross returns between 9-11% gross.

Contact Donny Green 0447 822 212 for full details

Student housing booms despite talk of slowdown

Demand for boutique student accommodation is booming, defying predictions of a slowdown due to falling student numbers and the rising Australian dollar.

The pipeline of new projects being planned or developed has doubled in the last year to $6.02 billion, according to construction information company Cordell.

International providers like Urbanest, which is backed by a large US pension fund, and Campus Living Villages, are expanding rapidly, saying demand far outstrips supply.

New players are emerging, with a group of property heavy-hitters from international infrastructure developer Plenary Group forming a new company, Iglu, and moving into the sector with the help of Jonathan Gliksten, former managing director of international student housing provider Urbanest.

Urbanest itself opened two new “communities” this year in Adelaide and Sydney and owns another in Brisbane. CEO Andrew Lee said all were full, and there was a waiting list. He hasn’t felt any effects from declining student numbers.

“What we’ve seen is, though there is a fallout largely of Indian students who would have studied vocational qualifications, that’s been more than made up by the 16 per cent increase in Chinese students who have come in,” Mr Lee said. “It leaves the numbers almost static overall.”

Industry heads claim the sector brings steady returns based on higher occupancies than regular residential investments and higher rental growth than commercial property.

The sector has benefited from the shortage of affordable accommodation in Australian cities, although rooms in the new buildings are hardly cheap.

Urbanest single rooms in Sydney begin at $365 a week, which includes bills, security, a shared kitchen, broadband internet and common lounge areas with computers.

Universities view the provision of accommodation as crucial to competing with universities in other countries. With no tradition of student boarding, they have some catching up to do.

Monash University in Melbourne, Sydney University, University of NSW and Australian National University in Canberra are all building or planning large student apartment buildings.

Other major universities are making inquiries. Trevor Hamilton, director of architects Nettleton Tribe, said he was working on the designs for eight student housing projects nationally with at least 2500 beds.

“We’re seeing a lot of universities that haven’t put their heads up before now trying to do it,” Mr Hamilton said. “There’s a lot going on. There’s no affordable beds available at any major city for student accommodation.”

The asset class is often likened to infrastructure because some are built on university land in a public-private partnership between the university and developer. Campus Living Villages builds on university land and gets a secure, long-term return before handing the facility back to the institution after 35 to 40 years.

Campus Living Funds Management Limited, a wholly owned subsidiary of infrastructure group Transfield Holdings Group, manages a $1.2 billion global fund of student housing assets in Australia, New Zealand, the US and UK.

Around 99 per cent of their 8000 Australian beds are occupied.

Transfield Holdings chief Nicholas James said the sector did not follow the same cycle as residential property because in tough financial times, it was common for underemployed people to study and upgrade their skills.

“In our experience over the last few years, the volatility of revenue has been relatively low, while other sectors have had relatively more volatility in their demand characteristics and sales.”

“Many universities in Australia have some plans to either improve or expand their accommodation in the next few years.”

However, banks have become more stringent with their credit since the financial crisis, making projects harder to stack up. This has prompted many universities to develop the buildings themselves on their own land.

The federal government’s re-vamped National Rental Afford­ability Scheme is also a driver, ­enabling universities to claim tax breaks for building accommodation.

A development application by Sydney University for a five-storey student accommodation building for 128 students on the Santa Sophia College site is before council.

Peter Bates, chief of Unilodge, which operates more than 30 student accommodation buildings, said those with the capital to build them had fewer competitors as banks were reluctant to lend to the sector.

He said banks typically lent only 50 or 60 per cent of the value of the project, viewing the fact that they were limited only to students as a mark against the sector.

“It’s all very unfair because the product rents better and at a higher rental yield than standard residential products,” he said.

Mr Bates said falling student numbers had slowed the take-up of rooms, but vacancies had not increased. “The ramp-up in intake is not as strong as it was in absolute boom times. Whilst you get to your occupancy levels, it takes longer.”

Others like Urbanest operated a completely private model outside of campus but Mr Lee said he was in talks with eight different universities over exclusive, permanent bookings of his rooms. He planned to build about 10,000 rooms around Australia, or at least 20 buildings, within the next decade.
(Source:Ben Hurley The Australian Financial Review 19/5/11)

Government Subsidy For You!

UniLodge Realty currently has apartments that qualify under this Subsidy. Contact Donny Green 0447 822 212 for details.

NATIONAL RENTAL AFFORDABILITY SCHEME

The National Rental Affordability Scheme (NRAS) is a long-term commitment by the Australian Government to invest in affordable rental housing. NRAS seeks to address the shortage of affordable rental housing by offering tax-free financial incentives to the business sector and community organisations to build and rent dwellings to low and moderate income households at rates below market value for 10 years. It aims to:



•Increase the supply of new affordable rental housing.
•Reduce rental costs for low to moderate income households.
•Encourage large scale investment and innovative management of affordable housing.


The Government has committed approximately $1 billion to the Scheme over four years to stimulate the supply of up to 50,000 new affordable rental dwellings.

How does NRAS work?
NRAS provides a National Rental Incentive to the business sector and community organisations to build and rent dwellings to low and moderate income households at least 20% below market rates.

The annual incentive is income tax-free, indexed annually and complemented by existing taxation arrangements including depreciation. The incentive currently comprises of:

•An Australian Government contribution of $7,143 per dwelling per year for 10 years as a cash payment.
•A State or Territory Government contribution of $2,381 per dwelling per year for 10 years as a direct payment.




Who benefits from the scheme?
NRAS aims to provide affordable rental housing for low to moderate households, including Australia’s key infrastructure workforce, such as teachers, nurses, police officers and paramedics. Eligible individuals and families will be able to rent NRAS dwellings at 20% below market rates, thus making their housing more affordable.



NRAS is intended as a tax-free commercial, profitable investment for participants while also increasing the supply of affordable housing in Australia. Investors in the Scheme may benefit from enhanced cash returns, certainty of the annual rental incentive and reduced vacancy rates over the 10-year life of the NRAS.



Who is eligible to participate in NRAS?
Eligible participants may include financial institutions, investors, private developers, not-for-profit organisations and local governments who may build, own, finance or manage the NRAS dwellings.



Who can rent an NRAS dwelling?
Income levels for eligible NRAS tenants are generous and accommodate a range of low to moderate income earners. The NRAS also allows for tenant salary increases of 25% above the income limits.



For a comprehensive list of eligible income levels provided by the Government,

visit the SEWPaC website.



Who manages the Scheme?
The Department of Sustainability, Environment, Water, Population and Communities (SEWPaC) is responsible for the implementation and ongoing management of the NRAS, in consultation with the Australian Taxation Office.



The Australian Government is working closely with State and Territory Governments, investors, financial institutions, property developers and not-for-profit housing providers in the ongoing management and implementation of NRAS.



The benefits of investing in an NRAS approved property include:



•Increase in income.
•Ownership of a newly built property.
•Potential investment earnings from the growth in the property value.
•Potential negative gearing benefits and positive cash flow at the same time.
•Tax-free income indexed for 10 years.
•Tax offsets indexed for 10 years.
•Tax deductions on interest payments.
•Tax deductions on property depreciation.
•Social responsible investment in affordable rental housing.
•A choice of properties throughout Australia from one source.
•Ability to opt out at any time.


For detailed information provided by the Government, visit the SEWPaC website.

UniLodge Realty currently has apartments that qualify under this Subsidy. Contact Donny Green 0447 822 212 for details.

Current Investment Opportunities !

All details of properties below go to www.unilodgerealty.com.au

UniLodge D1
$170,000 - $190,000

UniLodge D2
$180,000

UniLodge 740
$170,000

UniLodge on Villiers
$220,000 - $250,000

UniLodge on Lonsdale
$265,000 - $310,000

UniLodge Vivida
$180,000 - $210,000