It Takes More Than a Room: PBSA Evolves to Meet Student Demands

“Students today expect more than just a room,” says Scape chief executive Anouk Darling. “They want intelligently designed, amenity-rich, community-driven environments that support mental health, social interaction, sustainability goals and convenience all on their university’s doorstep,” she told attendees at The Urban Developer ’s Urbanity-25 conference on the Gold Coast, which wrapped up on Thursday. Scape is putting its money where its mouth is with the likes of its student precinct KEKI ( pictured above ) that is close to the University of New South Wales and offers social programming and public art spaces. “Technology is no longer a feature, it’s becoming a foundation,” Darling says. “And everyone expects it—from our investors, in terms of how we’re reporting, to how we’re delivering experiences. We’ve got a unique ecosystem—for students, their world is tech.” Student expectations But what does this mean for student experiences, both on-campus and at home? “You have to be able to be talking on the channels they need to talk on, from WhatsApp to WeChat. No student ever would say ‘call me’,” Darling says. “We use a lot of agentic AI, so we’re actually building out our own capability in terms of how we connect with offshore agents, in particular multi-language, and then through the onshore experience. ▲ Scape chief executive Anouk Darling: No student ever says ‘call me’. “In development, there’s great technology coming online in terms of 3D for feasibility modeling and assessment. So tech plays a part, from acquisition, land sizing and feasibility of projects right through to the operational experience.” The sector is evolving rapidly, she says. “There’s a shift toward tech-enabled living, think smart access, seamless payments, community engagement apps,” Darling says. “ESG credentials are no longer optional; investors and students alike are focused on sustainability and wellness. “Flexibility and experience are the new currency, all of which are areas of focus for Scape. We have over 19,000 students living with us so we have access to a large, warm pool of feedback—and Gen Z are never shy of sharing!” Technology-enabled university planning The focus on tech expands further than student expectations for their accommodation. HDR Education &amp; Science principal Graeme Spencer says that the team has invested in digital maps for campus masterplanning and while they focus on education rather than accommodation spaces, the residential element is always an important factor. “Part of that masterplanning is actually identifying sites and developments and then doing an assessment of how many student accommodation units we can include in that envelope, and the proximity of student accommodation to that campus,” Spencer says. “So then universities have an awareness of it and they can start planning.” ▲ HDR worked on optimising the Western Sydney University Bankstown campus. Universities themselves as asset owners—the University of Melbourne owns a million square metres of assets and the University of Sydney has around 2000 buildings—need to be thinking about where accommodation and campuses are being positioned for the future too. Using technology enabled mapping for education facilities themselves as well as accommodation is increasingly important and has been key to success at the likes of Western Sydney University’s Bankstown campus. “We were faced with some incredible challenges around material costs, labour costs, supply shortages, so we had to bring the budget back,” Spencer says. “Instead of taking out the interiors, we used data-driven design to evaluate timetabling, the size of classes, and rationalise, and we took out seven learning studios. ▲ Inside the Western Sydney University Bankstown campus: $7 million saved. “It saved the university $7 million by just being more efficient, as opposed to dumbing down interiors, which tends to be the default.” Universities are focused on the utilisation and optimisation of existing assets, Spencer says. “[They are] looking at existing building stock and being really careful about planning the next buildings, taking more time in developing the brief, spending more time about reusing existing assets and adapting existing assets, and looking at new opportunities with industry partners, and that could be like developers in particular.” Working smarter not harder seems to be the catchphrase for PBSA and university campus planning alike, but that’s not to say it’s all plain sailing. Headwinds International student demand for Australian universities is being caught in the housing crisis’s reputational crosshairs, Darling says. “[Students] only take up to 6 per cent of the residential-for-rent market,” she says. “So purpose-built student accommodation is actually a solution to alleviating the residential-for-rent environment.” This misunderstanding has indirectly damaged the sector, with “badly drafted” tenancy acts proving a big issue, Darling says. “[They are drafted] by governments who don’t understand how PBSA operates and that continue to cause headaches. “Tenancy acts have no understanding of what purpose-built student accommodation delivers in terms of a holistic student experience—we’re just tacked on to the residential market, and it’s so punitive for how we operate. ▲ The Scape Franklin asset in Melbourne, home to RMIT. “We build purpose-built environments that help them thrive … and yet they can break lease with no notice at the end of exam time, and we can’t rent to anyone else. We can’t fill our buildings. “All we need is for local governments to work with us on the tenancy act, and our world will be a much better place. But right now, the thematic around that is destroying the sector.” On top of that, the PBSA sector is suffering the same challenges as everywhere else; planning delays, cost of land, cost of capital and the cost to construct, she says. “[And then] regulatory scrutiny around international student caps or visa policy changes also impact demand and the overall brand of education in Australia unfortunately. “So yes, there’s still demand, but the Government has put visas up to $2000 from $300; it’s the most expensive in the world. They’ve prioritised arrivals in terms of how they control the speed of visas,” Darling says. “While there isn’t a cap that passed, regulations slow down the base application process. So there are all these soft measures happening [and impacting the sector].” Opportunity for PBSA Darling says that despite the difficulties, PBSA still benefits from the ongoing strength of international student demand. “Additionally, PBSA is increasingly viewed as a stable, counter-cyclical asset class by investors, offering long-term rental income, and strong occupancy fundamentals,” she says. “Political instability internationally also impacts where students choose to study, with Australia increasingly seen as a stable and safe place to live and learn.” That’s also been the case with build-to-rent and senior living, markets into which Scape has made major moves in recent years, following the launch of a build-to-rent arm in 2023, and its $3.85-billion Aveo megadeal . ▲ Scape Franklin has more than 940 student beds. Foreign capital sees Australian PBSA as a “defensive growth” play, she says, and Scape benefitted from international interest this year when it opened a $6-billion open-ended property fund. “Yields remain attractive compared to similar assets in the UK and Europe, while Australia’s education sector continues to expand. “We’re seeing capital from North America, Canada, Europe, the UK, Korea, Singapore, and the Middle East become increasingly active. In future, we may see capital pools from Japan as they seek long-term, stable yield in English-speaking markets.” “As overall global student mobility increases, Australia will continue to shine.”

It Takes More Than a Room: PBSA Evolves to Meet Student Demands

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