M&G Real Estate (M&G) has acquired a purpose-built student accommodation (PBSA) asset in Melbourne, for $61.8m. Following the acquisition of a prime residential portfolio in Osaka at the end of 2024, this investment marks M&G’s first investment in Australia’s PBSA sector – and is in line with its Asia Pacific Living strategy to invest in high-quality assets in markets supported by strong demand and long-term growth prospects.
Park Avenue comprises 369 beds across 328 units and is located near leading educational institutions, including the University of Melbourne, Monash University and RMIT University.
Through an upgrade programme that includes electrification and installation of solar panels, Park Avenue is targeting a 4-Star Green Star Performance certification.
“Our entry into Australia’s PBSA market reflects our confidence in the region’s long-term fundamentals and the significant investment opportunities it offers our clients.
“Constrained housing supply continues to drive the need for high-quality rental housing, particularly in developed markets like Australia, and institutional investors have the long-term capital to invest in these assets that meet a societal need alongside providing investment returns.”
Jing Dong (JD) Lai, Chief Executive and Chief Investment Officer, M&G Real Estate Asia
With strong historical occupancy, the asset is well-positioned to benefit from Melbourne’s strong student demand and infrastructure investment, including the upcoming Parkville Metro Station opening in 2025, which will improve transport links to Melbourne Universities and other key transport nodes across Melbourne.
The acquisition of Park Avenue expands M&G’s presence in the region’s living sector, increasing its total exposure to $1.3bn. With the growing appetite for premium, institutional-grade residential assets across Asia Pacific, M&G remains focused on identifying opportunities in developed markets where supply is constrained and demand fundamentals are strong.
This investment aligns with its strategy to build a well-diversified portfolio that delivers long-term value in resilient, high-growth markets.
“This acquisition demonstrates our conviction in the PBSA and broader living sectors, and supports our strategy to grow in some of the region’s most resilient and dynamic living markets.
“The student accommodation sector in Australia is underpinned by strong fundamentals and increasing international student demand, demonstrating an ability to deliver attractive risk adjusted returns.
“Park Avenue is a well-located, high-quality asset that aligns with our disciplined investment approach, with the potential to provide excellent investment returns to our investors.”
David Askham, Director of Portfolio Management, Asia Living, M&G Real Estate
Australia’s PBSA market is experiencing rapid growth, having nearly doubled in the past decade, and now has over 132,000 beds. Despite this expansion, it still serves only 6.5% of the country’s full-time on-campus student population, compared to 25% in the UK.
Demonstrating strong resilience, it has achieved high occupancy rates with rental growth exceeding broader residential markets in key global cities.
