Aspen Group has purchased an Upper Mount Gravatt student accommodation complex with plans to repurpose it as a traditional co-living investment.
The Uniresort facility, on 1.21 hectares at 80 Tryon Street, is costing $18.5 million.
The property includes six four storey buildings containing a total of 64 apartments and 304 bedrooms, each with a study alcove and ensuite.
There is also a three-bedroom manager’s unit, caretaker’s residence, gym, pool, sauna, spa, steam room, tennis court, BBQ area with undercover dining and 130 basement car parks.
The present net annual income is $1,060,980; most occupants are from Griffith University or nearby language schools
Savills’ Robert Dunne and Will Carman were the agents.
The deal comes three months since Aspen acquired three more assets for its Build to Rent portfolio:
- A Burleigh Heads complex with 18 single storey townhouses, which cost $3.15m;
- A three-level ex-YWCA co-living facility, with 55 rooms, in Newcastle ($3.75m);
- A part-constructed aged care community on 3.7ha at Strathalbyn, an outskirt Adelaide suburb ($2.46m).
Development, rental upside
The Upper Mount Gravatt property was marketed for its development upside – the zoning allows for buildings of up to eight storeys.
The present gross lettable area – 9370 sqm – can be more than doubled (to c24,100 sqm).
“We intend to broaden the student customer base to include other young, like-minded customers who value the co-living experience and relatively cheaper rents,” an Aspen statement said (story continues below).
“We expect the majority of our tenants will be on standard residential leases or rooming accommodation agreements with a minimum term of six months, however there is the opportunity to offer short-stay options given the apartments are fully furnished,” it added.
“There is also the potential to strata title some or all of the apartments…helped by their fairly standard residential layout and existing separate electricity and hot water meters,” according to the buyer.
It is aiming to rent the bedrooms at c$200 per week – trebling the present annual income to about $3.16m.
Aspen will fund the purchase using existing debt service agreements.
Build to Rent
Mr Dunne said eight offers were received for 80 Tryon St following a public marketing campaign.
“This type of property is now being referred to as Build to Rent,” he added.
“This asset class includes student accommodation, boarding houses and apartment blocks owned in one line,” according to the executive.
“The demand for these investments is strong and getting stronger due to the diversified income and sustainable capital growth in a low interest rate environment”.
Subscribe to our newsletter at the bottom of this page.