The Living Company shows faith in student future with $32m Waterloo purchase

The housing developer has snapped up a site in Sydney’s Waterloo, arguing that more accommodation is required to address the specialist needs of students.

The Living Co co-founder and joint CEO Craig Carracher is advocating for more student accommodation. Picture: Jane Dempster

Housing developer The Living Company has put its confidence in the student accommodation sector on display by snapping up a site in Sydney’s inner-city Waterloo for $32m.

While international student numbers were a hot-button political issue before May’s federal election, greater certainty has returned to the area with the government seeking to manage inflows amid the country’s ongoing housing shortage.

The Living Company’s founder and joint chief executive Craig Carracher has argued that more accommodation is required to address the specialist needs of students, and the company intends to develop a $150m complex with backing of its latest fund.

The trust has the backing of major investors including South Korea’s National Pension Service, Canada’s Caisse de dépôt et placement du Québec, and Dutch group APG.

It will develop about 300 student rooms, capitalising on its proximity to the nearby foundation school for University of Sydney at Taylors College.

Mr Carracher said the company still faced some obstacles from state residential tenancies legislation, which fails to accommodate or consider the impact on student providers.

“We cannot lease to the open domestic market under the planning rules, so break leases mean empty beds and higher rents, which is counterintuitive in a housing crisis market,” he said.

The company, previously known as Scape, has been among the most active of players this year, picking up the Aveo retirement living village portfolio from Canadian group Brookfield in a $3.85bn deal, and also advancing its plans in build-to-rent, where it is undertaking a development in Sydney’s inner west at Marrickville via its Rent To Live Co unit.

Mr Carracher said the company’s scale, with around 110 villages, and student and rental towers, meant there was the opportunity to drive down costs and reduce rents.

The Living Company will develop student housing on a site in Waterloo, Sydney, which it bought for $32m.

He said this would create real competitive value in the market for consumers, tenants and residents.

“Waterloo is an exciting opportunity to expand our urban footprint of high quality residential offerings across the living spectrum branded to our new group brand The Living Company,” he said.

For the Waterloo deal, the company purchased a site from a Hong Kong-based owner, who had held the property that currently houses two warehouses, parking and offices.

The Living Co is well positioned to capitalise on the evolution of the suburb, which will be boosted by development around the new Sydney metro Waterloo station.

The Waterloo Collective, a joint venture between Mirvac and John Holland, is developing a mixed-use precinct that includes a 25-storey building for student housing, operated by rival Iglu.

Colliers agents Trent Gallagher, Steam Leung and Zhenni Lu sold the property.

The agent said the property drew strong competition, with interest from a number of residential and student developers, looking to get a foothold.

“Located at the northern edge of Waterloo, within the Danks Street Precinct, the property benefits from the vast amenity the highly desirable Redfern and Surry Hills villages have to offer,” Mr Gallagher said.

In May, The Living Company won a major commitment from international investment house CBRE Investment Management, to back a new $6bn fund focused on the sector.

Student accommodation stalled ahead of the federal election due to the Coalition’s plans to slash international student intakes. While government plans for student caps were defeated last year, it has sought to control numbers by agreements with individual institutions and slowing processing when numbers jump, as well as shutting down dodgy operators.

The student accommodation sector has been active this year. The UNSW snapped up a student accommodation complex near its campus in Sydney’s eastern suburbs and another block traded in Melbourne’s Parkville.

Originally published as The Living Company shows faith in student future with $32m Waterloo purchase