Australia's top universities are taking in a greater proportion of full fee-paying international students, a broader trend which is driving demand for student accommodation places, according to an industry report.
This year alone 8,290 new purpose-built student accommodation beds will become operational nationally, a rise of 20 per cent on the previous year according to analysis by Knight Frank.
Sydney, Melbourne, Brisbane and Adelaide will account for 80 per cent of the new supply,
But demand still outweighs supply with growth in both local and international students underpinning demand, according to Knight Frank.
Helping to filling the new beds are international students. Among them, Chinese students are the largest single category. Chinese higher education enrolments hit 124,700 by April this year, a 17 per cent rise on a year earlier.
The trend is expected to grow at a rate close to 10 per cent annually, on Knight Frank forecasts, pushing enrolment of Chinese students close to 294,000 by 2027.
"There has been speculation of late that because Chinese global university rankings are improving, that this may have negative consequences for Australian universities, given their part reliance on full-fee paying international students," Knight Frank research director Paul Savitz.
"However, when students are looking to study abroad, research shows that lifestyle factors are equally as important as the quality of education.
"Because Australia offers international students a fantastic lifestyle with excellent employment opportunities, we have every confidence international student numbers will continue to rise."
The research identifies another noteworthy trend accompanying the growth in international students.
The domestic offer rate - the proportion of local students offered records among those applying - was 82.5 per cent last year across the tertiary system, with 286,216 local students receiving offers.
However that metric drops among the so-called Group of Eight universities, including the University of Melbourne, the Australian National University and The University of Sydney.
The Go8 universities have the lowest domestic offer rate, around 75 per cent for the past four years.
There is significant variation among them as well, with the University of Melbourne at around 65 per cent, while ANU is close to 85 per cent.
"Equivalent data is not available for overseas applications, but the lower acceptance rate for domestic Go8 students appears to enable the acceptance of a greater proportion of full-fee paying international students," the Knight Frank report said.
The Go8 universities account for five of the top six universities by overseas intake, with around 40 per cent of all overseas enrolments, up from around 30 per cent in 2011.
On the ground, student accommodation developers have been busy, despite the well-reported setbacks at fund manager Blue Sky which cut the carrying value on five of its student living funds.
That has not put off Singapore's Wee Hur which has been buying sites in Melbourne and Sydney, with the aim of establishing a fund holding 5000 beds locally, with a portfolio value of more than $1 billion.
Another big player is Scape which recently closed out a $500 million student accommodation fund with backing from two European institutional investors and a Middle Eastern sovereign wealth fund.
With the latest capital raise, Scape's Australian platform has grown to more than $1 billion in equity commitments.
It gives Scape the firepower to drive a project pipeline with a gross development value well above $3 billion, delivering more than 10,000 student rooms.
Universities themselves are players in the student digs space, including the University of Melbourne which is looking to tap institutional investment for at least two facilities in inner-city Melbourne.
The university has brought in advisory group Flagstaff Partners to run an investment process on the two new student accommodation developments with a combined portfolio of close to 1000 beds.
The sector is attracting significant interest from offshore, including South Africa's Redefine Properties which has sites in Melbourne and Hong Kong's Gaw Capital which bought a Perth site for student accommodation two years ago.
Source: Financial Review