Spotlight:
World Student Housing 

World Student Housing
The global search for scale

4 October 2017, by Savills World Research

There are huge opportunities for investors who can successfully navigate local markets to deliver new student housing

Records were broken once again in 2016, when global investment into Student Housing topped $16bn. Institutional investors, sovereign wealth and pension funds snapped up portfolios in a global search for scale and income producing investments in a low yield environment.

Activity was focused on the US and UK; the most mature global markets where the majority of investable stock is found. Viewed by investors as a residential asset, the sector is maturing fast in mainland Europe.

 

Investment in Germany is expected to reach €1bn this year and the frontiers are expanding: Poland, Hungary, Portugal and the Czech Republic are now attracting attention too. In these markets, new build Purpose Built Student Accommodation (PBSA) is meeting the demands of students while expanding the investable product available.

The development of the sector has gone hand in hand with the globalisation of higher education. As migration and international student numbers become hot topics in the UK and US, other markets have recognised their importance as a tool to fuel domestic economic growth. They have instigated national internationalisation programmes and improved the marketing of their universities in concerted efforts to catch up with the frontrunners.

The availability of convenient, modern PBSA that plays an active role in the student experience, and could be a catalyst for such catch up. In all markets though, PBSA remains undersupplied so there are huge opportunities for those who can successfully navigate local markets to deliver new stock.

 

 
Student housing at Utrecht University

▲ Student housing at Utrecht University


Summary points

Investment

■ Global investment into student housing reached $16.4bn in 2016, a new annual record

■ Cross border investors undertook 37% of all global student housing investment deals

■ Annual investment in the sector increased 245% in France and some 380% in Germany

Demand

■ Student numbers continue to rise in France, Germany the Netherlands and Australia

■ Internationalisation strategies for higher education are in place in most major markets

■ Uncertainty around Brexit and Trump has done little to alter the sector’s appeal in the UK and US

Supply

■ Provision of student housing is low, ranging 6% to 24% in the major national markets

■ International providers have emerged, bringing international expertise to new markets

■ New provision is replacing older, outdated stock no longer fit for purpose

Articles from Spotlight: World Student Housing 2017 – 2018

New record levels of investment are being set

The cross-border search for scale has seen record investment volumes with significant increases witnessed in Germany and France

Following national student trends

Trends in higher education student enrolment have continued to diverge among the most globally important markets

Student mobility reinforces need for quality

As the market matures students have come to demand higher quality from their living accommodation

Country overview

04 October 2017

Country overview

Major student housing markets at a glance

World student housing outlook

Investment growth will continue as pioneers sell and recapitalise, fuelling investment activity with more trading stock

 
 

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Key contacts

Paul Tostevin

Paul Tostevin

Associate Director
World Research

Savills Margaret Street

+44 (0) 20 7016 3883

 

Marcus Roberts MRICS

Marcus Roberts MRICS

Director - Europe
Residential Capital Markets

Savills Margaret Street

+44 (0) 20 7016 3799