The country's largest student accommodation provider Scape Australia has completed the takeover of rival Urbanest in a $2 billion deal.
The deal, which was touted in December and is expected to close at the end of April, will expand Scape's existing student room count, now expected to lift to 23,000 rooms, with a further 9,000 beds in planning and under construction.
The acquisition, which was signed off by the Foreign Investment Review Board, comprises 7,000 rooms across 14 buildings, seven of which are in Sydney, four in Melbourne, one in Brisbane and two in Adelaide.
The student accommodation giant has seen its core fund grow rapidly in the last 12 months, also landing the Atira portfolio controlled by funds manager Blue Sky and investment bank Goldman Sachs, for $680 million.
Scape, led by executive chairman Craig Carracher, acted on the emerging threat of Covid-19 at the beginning of the year, after receiving direct contact from staff based in Wuhan, China's eighth largest city for international students.
Stringent measures were rolled out across the Scape portfolio on 24 January to combat the spread of the virus, with the introduction of medical assessments for students returning from China and an enforced 14-day isolation period, with meal provisions, waste removal, laundry processing, and medical checks.
“We identified five black swans that could effect our business, this fell within one of the risk profiles for 'infections diseases',” Carracher told The Urban Developer.
“We have since commenced our in building nursing solutions, to conduct temperature checks on students entering and leaving the building, as well as counselling on the basics of the coronavirus symptoms.
“I'm pretty sure it puts as down as the first to respond to the coronavirus threat nationally in the residential sector.”
Scape currently has over 100 students still in isolation across its 14 buildings, returning no positive tests.
Carracher pointed to the use of permanent cleaners and security guards, which have upheld deep cleans and a no visitor policy, as the reason for the result.
“Governments around the world see purpose built student accommodation in the old dormitory language,” Carracher said.
“We have spent the last week convincing the health departments that purpose built accommodation is probably the safest place to be at this moment.
“Our rooms are designed for long term living and isolation with 80 per cent of our rooms set up in a studio format.”
Scape has since been approached by multiple government departments for potential use of their buildings as isolation facilities due to their proximity to city centres and hospitals.
Under a potential agreement, accommodation solutions within Scape facilities would be made available to health workers to help maintain quarantine protection from family members during a period of intense work load requirements.
The proposal comes as an alternative to the hotel sector, which is currently being repositioned to accommodate coronavirus patients as travel bans continue to push tourism to a grinding halt.
Several hundred passengers from the Norwegian Jewel cruise ship, who were denied entry into the US under new immigration laws, and then repatriated to Sydney on a Qantas flight, were recently placed into mandatory 14-day quarantine at Accor’s Swissotel.
“The solutions to handle the spread of coronavirus are not available in residential towers, or boarding houses or hotels,” Carracher said.
“You can't do more than boil hot water in those hotel rooms.
“What will come out of this crisis is an understanding that the safest place both in a security, psychical and mental welfare sense is in purpose built solutions, not share residential or boarding houses.”
The student accommodation provider is hopeful that its diligent approach and unique product offering can offer a more controlled outcome in order to combat the spread of the deadly pathogen.
Scape is confident the pandemic will be controlled during the course of 2020 with borders reopened and students returning to Australia and to structured direct education.
“It is better for our education sector and communities if our international students, work together, live together and study together within a safe environment providing the highest wellness, hygiene and cleanliness solutions provided to them,” Carracher said.
“While we are actively assisting in the fight against the Covid-19 outbreak, we are also preparing for a return to normalcy.”