Developer of Braddon student accommodation block, Mesja Pty Ltd, seeks investor for 406-unit project

The six-storey development at 44-46 Mort Street has been given the green light following an application submitted in 2020.

The value of the project upon completion is expected to be about $100 million.

Spanning a 3058-square-metre block which currently houses a commercial office, the development will also include pastoral care areas, retail spaces and basement parking.

The plans outlined three room types: 17-square-metre rooms, 21.5-square-metre rooms and 29-square-metre accessible rooms.

The developer, Mesja Pty Ltd, is seeking an owner operator or investor for the project. Agencies CBRE and Ray White Commercial are leading the campaign.

Nic Purdue, CBRE managing director, ACT, said the group was seeking investors to participate either on a "fund through basis" - where an investor provides finance to a developer throughout the construction - or as a "takeout partner" - essentially a long settlement period where a buyer would take possession upon completion.

"Who we've been dealing with are investors that are keen to get exposure to the Canberra student accommodation market who are more than happy to work with a local development partner to deliver the project, and they'll essentially take possession of a completed student accommodation development," he said.

Construction is expected to commence in August 2023 for completion in late 2024. It is hoped students will move in for the start of the 2025 academic year.

Mr Purdue said the development had attracted strong interstate interest so far.

"Because of the scale and the size of the project, this is also attracting interest from some of the institutional capital and that's both institutional capital based here in Australia and some offshore capital as well," he said.

Mr Purdue said off-campus housing would appeal to students seeking more flexibility without having to compete in Canberra's strained residential rental market.

"At the moment students that want to live off campus are essentially subject to the private rental market in Canberra," he said.

"So being able to deliver this amount of beds off campus is a great option for students that want a bit of flexibility around where they live."

Paul Savitz, director of operational capital markets at Savills Australia and New Zealand, which produces an annual student accommodation report, said record numbers of international student visas were lodged in March, April and May this year.

"Those months are effectively a leading indicator in terms of how much demand there is going to be in semester two [2022]," he said.

"Because of the way the international border opened with little warning we're going to actually see an unusual bounce for semester two in terms of student accommodation demand.

"What we're seeing across the country, not just Canberra, is with residential vacancy rates at all-time lows, international students are actually going to struggle to find space in student accommodation."

Mr Savitz said an additional 731 student beds at ANU and 733 beds at a new development on Moore Street in Civic are expected to be delivered for the 2023 academic year.

Developer Mesja Pty Ltd is also seeking an investor for its proposed build-to-rent project at 496 Northbourne Avenue, Dickson.

The 1.54-acre site is slated for 435 build-to-rent apartments, 1900 square metres of retail and commercial space and 470 basement car parks.

The end value of the project is understood to be in excess of $200 million.

The development is also being offered for sale through CBRE and Ray White Commercial.

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