afr.com
Property investors lash Labor’s plan to cut Australia’s international student intake
Michael Bleby
The head of Blackstone’s local real estate operations, Chris Tynan, says Labor’s decision to cut the number of international students allowed into the country is short-sighted and undermines one of the largest export industries outside mining.
“These students turn up with hundreds of thousands of dollars in their back pocket to spend in Australia – and we don’t want them, which seems short-sighted,” said Mr Tynan, an influential investor whose assets include Crown Resorts and data centre giant AirTrunk.
Education is one of the country’s largest export industries, with overseas students paying high fees to study at Australian universities and private colleges.
Last month, Labor announced it would overhaul how the international student market worked, cutting the number of admissions by 30 per cent – a decision that has left the sector in turmoil. The government argues it remains ahead of levels before the COVID-19 pandemic.
Mr Tynan was not the only critic of the government’s approach to the international student market at The Australian Financial Review Property Summit on Tuesday.
The commercial property sector is heavily exposed to any fall in international students because they are a large proportion of the residents in student accommodation owned by large investors – including Blackstone. The amount of purpose-built student accommodation in Australia rose from 3000 rooms in 2020 to 41,000 in 2022.
More construction between 2023 and 2026 could add another 8000 rooms, according to research published by CBRE, although the realtor said this was still “likely to be inadequate when compared to our global peer market penetration rates”.
Noral Wild, the Australian chief executive of commercial real estate agency Cushman & Wakefield, said Labor’s changes came just after the “most challenging time” for student accommodation providers, the COVID-19 pandemic.
“It’s finally just recovered,” Ms Wild said. “It’s our fourth-largest export in this country. It brings in about $30 billion in revenue from international students. It makes no sense why we’d be messing with that, to me. Obviously, it’s political. It’s pretty short-sighted, and messing with an export market like that is pretty dangerous.”
Blackstone, which last year acquired Brisbane-based Student One’s 2300-bed student accommodation portfolio for more than $500 million – and had a “very large” exposure to the sector in the United Kingdom and the United States – regarded such property as “hugely beneficial” to Australia, Mr Tynan said.
“It’s one sector that doesn’t involve digging something out of the ground.”
But opposition to international students was also growing in other countries and, like Australia, was driven by concerns about housing, Mr Tynan said.
“We’re seeing very similar caps going into place in places like Canada, similar rhetoric in the UK,” he said. “And it is a housing story. It’s a derivative of the fact that the housing’s perceived [as] very tight in those locations.”
Speaking on the same panel as Mr Tynan and Ms Wild, Barrenjoey chief economist Jo Masters said student arrival numbers had already been slowing, even without the cap.
“We look at the ratio of the number of student visa applications to approvals, and normally, the rejection rate – for a want for better term – sits around 12 per cent,” Ms Masters said.
“It’s currently about 72 per cent so even prior to these caps, we’ve been seeing this processing slow down in order to try to moderate the flow.”
Dexus chief executive Ross Du Vernet said the message that the government was sending by restricting foreign students was “not a constructive or positive one”.
They would less directly affect Dexus as the company’s clients were mainstream universities, which are not as affected by the restrictions. But the target for cuts of vocational and training institutions would affect the economy as a whole.
“It’s that type of training and those type of people that we actually need to actually help drive some of the productivity improvements because we actually have issues in on the supply side,” Mr Du Vernet said.
“Shooting ourselves in the foot is, is my view.”
Marshy462 on
Won’t someone think of the property investors!?
shell_spawner on
Want to have international students in Australia, absolutely fine, build the accommodation for them at the universities cost !
3 Comments
afr.com
Property investors lash Labor’s plan to cut Australia’s international student intake
Michael Bleby
The head of Blackstone’s local real estate operations, Chris Tynan, says Labor’s decision to cut the number of international students allowed into the country is short-sighted and undermines one of the largest export industries outside mining.
“These students turn up with hundreds of thousands of dollars in their back pocket to spend in Australia – and we don’t want them, which seems short-sighted,” said Mr Tynan, an influential investor whose assets include Crown Resorts and data centre giant AirTrunk.
Education is one of the country’s largest export industries, with overseas students paying high fees to study at Australian universities and private colleges.
Last month, Labor announced it would overhaul how the international student market worked, cutting the number of admissions by 30 per cent – a decision that has left the sector in turmoil. The government argues it remains ahead of levels before the COVID-19 pandemic.
Mr Tynan was not the only critic of the government’s approach to the international student market at The Australian Financial Review Property Summit on Tuesday.
The commercial property sector is heavily exposed to any fall in international students because they are a large proportion of the residents in student accommodation owned by large investors – including Blackstone. The amount of purpose-built student accommodation in Australia rose from 3000 rooms in 2020 to 41,000 in 2022.
More construction between 2023 and 2026 could add another 8000 rooms, according to research published by CBRE, although the realtor said this was still “likely to be inadequate when compared to our global peer market penetration rates”.
Noral Wild, the Australian chief executive of commercial real estate agency Cushman & Wakefield, said Labor’s changes came just after the “most challenging time” for student accommodation providers, the COVID-19 pandemic.
“It’s finally just recovered,” Ms Wild said. “It’s our fourth-largest export in this country. It brings in about $30 billion in revenue from international students. It makes no sense why we’d be messing with that, to me. Obviously, it’s political. It’s pretty short-sighted, and messing with an export market like that is pretty dangerous.”
Blackstone, which last year acquired Brisbane-based Student One’s 2300-bed student accommodation portfolio for more than $500 million – and had a “very large” exposure to the sector in the United Kingdom and the United States – regarded such property as “hugely beneficial” to Australia, Mr Tynan said.
“It’s one sector that doesn’t involve digging something out of the ground.”
But opposition to international students was also growing in other countries and, like Australia, was driven by concerns about housing, Mr Tynan said.
“We’re seeing very similar caps going into place in places like Canada, similar rhetoric in the UK,” he said. “And it is a housing story. It’s a derivative of the fact that the housing’s perceived [as] very tight in those locations.”
Speaking on the same panel as Mr Tynan and Ms Wild, Barrenjoey chief economist Jo Masters said student arrival numbers had already been slowing, even without the cap.
“We look at the ratio of the number of student visa applications to approvals, and normally, the rejection rate – for a want for better term – sits around 12 per cent,” Ms Masters said.
“It’s currently about 72 per cent so even prior to these caps, we’ve been seeing this processing slow down in order to try to moderate the flow.”
Dexus chief executive Ross Du Vernet said the message that the government was sending by restricting foreign students was “not a constructive or positive one”.
They would less directly affect Dexus as the company’s clients were mainstream universities, which are not as affected by the restrictions. But the target for cuts of vocational and training institutions would affect the economy as a whole.
“It’s that type of training and those type of people that we actually need to actually help drive some of the productivity improvements because we actually have issues in on the supply side,” Mr Du Vernet said.
“Shooting ourselves in the foot is, is my view.”
Won’t someone think of the property investors!?
Want to have international students in Australia, absolutely fine, build the accommodation for them at the universities cost !