Both local and overseas student numbers at the University of Canterbury are rising steadily – up by about 50% since 2019, but the accommodation options on offer for young people are inconsistent in comfort and quality and often situated some distance from campus, explains Chris Scott, who covers capital strategies, acquisitions and financing at Mainland Capital in Christchurch, New Zealand’s fast-growing, second largest city.
Having carefully researched contemporary student accommodation offerings globally – and particularly those in English university cities such as Bath and Cambridge, Mainland Capital has acquired the 1.5ha site previously occupied by the Antonio Hall Catholic seminary.
With demolition of the quake and fire-damaged building complete, Mainland is about to commence the construction of Ilam Mews.
It will comprise 155 fully furnished units – ranging from individual studios to six-bedroom homes, totalling 457 beds in all, for people attending the university who are in their second year and upwards with prices starting at $475,000.
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“We’re breaking the mould, when it comes to private sector student accommodation in Christchurch,” says Scott.
“This will be a purpose-built community where parents can feel happy that their children are safe, warm, and able to be productive.”
Along with the units – each on an individual property title, there will be a spacious and welcoming student pavilion where residents can mix and mingle and Scott expects that a strong sense of community will quickly be established, just 700m from campus and close to local amenities.
In terms of investment, the properties are set to appeal to first-time investors who can see the advantages in providing a roof for their own children and perhaps keep it on, after graduation.
Ilam Mews is being built on the 1.5ha site previously occupied by the Antonio Hall Catholic seminary. Artwork / Artist’s Impression
The 155 units will add 457 beds just 700m from the University of Canterbury campus. Artwork / Artist’s Impression
Landlords can be “hands off” as a headlease covers the first two academic years - 2028 and 2029 - meaning no management burden for the investor, coupled with certainty of income. Artwork / Artist’s Impression
The structure of Ilam Mews means landlords can initially be reasonably “hands off” as a headlease covers the first two academic years: 2028 and 2029, meaning no management burden for the investor, coupled with certainty of income.
After this period, owners will take on leasing and management of their units, while landscaping, pedestrian paths, security and communal areas will still be managed by the body corporate.
Gavin Lloyd, general manager of projects at Bayleys, confirms that while marketing of the Ilam Mews offering has only recently commenced, as expected, he’s already noted considerable inquiry from the parents of prospective students – keen to ensure a comfortable environment for their children.
Safety measures at Ilam Mews include security patrols and firm rules around smoking and drinking.
“They figure that the child could be paying rent to them, instead of some other landlord and Mainland Capital has worked hard to ensure rents at Ilam Mews offer value for money, unlike anything else available in the market,” says Lloyd.
He notes that Ilam Mews will be unique with its blend of quality accommodation and superior shared services.
Chris Scott of Mainland Capital: “We’re breaking the mould, when it comes to private sector student accommodation in Christchurch.” Artwork / Artist’s Impression
Investors can expect gross returns ranging from 5.4% for studios to 6% for six-bedroom homes. Artwork / Artist’s Impression
Lloyd adds that interest among more seasoned investors, seeking to expand their portfolios in a new and innovative sector of the property market is also apparent.
“Some of them are looking at buying up a block of these units as a commercial grade investment.”
With land this close to the university now in short supply, thanks to the garden city’s post-earthquake renaissance, both Mainland Capital and Bayleys believe it’s unlikely that similar opportunities will arise in future.
With projected gross returns ranging from 5.4% for studios to 6% for six-bedroom homes, estimated net returns range from 4.08% to 4.69% Ilam Mews is therefore a very attractive proposition for investors.
Another consideration is that qualifying new-build purchasers may also benefit from exemptions from Reserve Bank loan-to-value ratio and debt-to-income restrictions, giving eligible investors greater financing flexibility.
Ilam Mews apartments at 265 Riccarton Road in Upper Riccarton, Christchurch, are priced from $475,000.
- Sponsored by Bayleys
