Canterbury student housing draws investors

A new purpose-built student village in Christchurch offers investors access to one of the country’s fastest-growing tertiary populations, with projected gross returns of up to six percent and a headlease arrangement covering the first two academic years.

Commercial real estate investment firm Mainland Capital is developing Ilam Mews, comprising 155 unit-titled residences offering more than 450 beds at 265 Riccarton Road, 700 metres from the University of Canterbury (UC).

Delivered fully furnished, the residences range from studios to six-bedroom terrace homes. The mix has been independently assessed against student preferences, reflecting strong demand for larger four-, five-, and six-bedroom configurations.

Construction is underway, with the first stage scheduled to open for the 2028 academic year.

Bayleys Projects General Manager Gavin Lloyd, who is marketing the residences for sale, says Ilam Mews responds to a structural mismatch between Christchurch’s expanding student population and the accommodation available beyond first-year halls of residence.

“UC enrolments reached a record in 2025, increasing 44 percent over five years, while international student numbers rose 11 percent in the past year alone,” he says.

“Canterbury’s tertiary institutions serve more than 40,000 students, yet purpose-built accommodation is scarce, and much of the private rental stock is poorly aligned with how students live.”

The imbalance is evident in applications for the 2026 academic year, when nearly 4,500 students sought just over 3,000 places in university-managed accommodation.

UC’s approximately 3,000 existing beds predominantly serve first-year students, leaving later-year, postgraduate and international students reliant on private housing.

Bayleys Projects National Director, Suzie Wigglesworth, says the development gives individual investors a direct route into a specialised residential sector more commonly accessed through institutional investment vehicles.

“Ownership allows investors to select a residence aligned with their preferred price point and return profile, while participating in a much larger, purpose-designed community,” she says.

“The headlease provides guaranteed income with no management burden while the village becomes established. The underlying proposition rests on identifiable student demand and ownership of a new-build asset in a proven rental location.”

The headlease will operate for approximately two years, covering the village’s establishment phase. During that period, appointed operators will oversee leasing and resident management. Owners will subsequently assume responsibility for leasing and managing their individual residences, while the body corporate will continue to administer landscaping, security and communal facilities.

Projected gross returns range from 5.40 percent for studios to 6.00 percent for six-bedroom residences, with estimated net returns ranging from 4.08 to 4.69 percent.

Qualifying new-build purchasers may also benefit from exemptions from Reserve Bank loan-to-value ratio (LVR) and debt-to-income (DTI) restrictions, giving eligible investors greater financing flexibility.

Ilam Mews will take shape on a circa 1.5ha site positioned between the University, Bush Inn shopping centre, and Westfield Riccarton.

Mainland Capital says it is one of the last significant development holdings at the heart of Christchurch’s established student precinct, where limited available land constrains the potential for comparable future supply.

Inspired by the mews lanes and collegiate courtyards of Edinburgh, Bath and Cambridge, Ilam Mews’ low-rise village will be arranged around landscaped pedestrian lanes and shared spaces. A communal pavilion will provide study, event and recreation areas centred on a heritage elm tree.

Bayleys Canterbury’s Adam Heazlewood says the design seeks to address the practical and social requirements of students that conventional rental housing often overlooks.

“Students need more than a bedroom close to campus. The quality of shared spaces, opportunities for connection, security and the balance between privacy and community all influence how successfully accommodation performs,” he says.

“Ilam Mews has been planned as a complete residential environment, with a range of formats that can support different stages of university life. There is no other development like it in New Zealand.”

The development’s position within an established student neighbourhood is central to its appeal.

“Riccarton and Ilam already sit at the centre of student life beyond the university campus, with retail, transport, hospitality and everyday services close at hand.

“At just 700 metres from UC, Ilam Mews places students within walking distance of their studies while retaining the amenity and connectivity that make this one of Christchurch’s most consistently sought-after rental locations.”

Lloyd adds that the development brings new supply into a clearly defined segment of the city’s housing market.

“Ilam Mews combines sustained enrolment growth, constrained purpose-built supply and a location embedded within Christchurch’s tertiary precinct. It offers investors exposure to the continuing evolution of student accommodation while delivering housing designed specifically around residents' needs.

“It is an opportunity to invest in the people who will shape Canterbury and New Zealand’s future, while participating in the growth of an increasingly established global asset class.”