Student housing is one of the top four sectors when it comes to investment prospects in 2020 worldwide because demand continues to grow faster than supply, according to a new study carried out by market research and advisory specialists BONARD.
Last year the sector continued its record growth trajectory, booking over E9 bln in international transactions, excluding the US. The big global players in real estate decided it was time to invest, which resulted in 105 transactions in Continental Europe, the UK and Australia.
In Europe, including the UK, over 700 companies have now invested in the sector and last year saw the completion of 142 PBSA projects with 43,655 beds.
Average transaction yield rates ranged from 3.7% to 6%, with a number of significant deals, such as the takeovers of the Atira, Liberty Living and Urbanest portfolios.
Investor interest has been strong because demand for student housing has been growing at faster rates than demand for any other asset class, according to BONARD, and because it is a counter-cyclical asset class. Its growth trajectory is forecast to continue regardless of economic slowdowns or even recessions.
Demand has been and continues to be driven by the constant growth in mobile and international student numbers. In the last ten years, international student numbers have increased by 27% in the UK, by 53% in Continental Europe and by a massive 92% in Central and Eastern Europe.
Continental Europe saw an increase of 4.3% last year and the rate of growth shows no sign of slowing down.
EU cities feature at the very top of the global rankings for numbers of foreign students. London has 120,000, Paris 77,000, Vienna 52,000, Madrid 46,000 and Berlin 37,000, just to give a few examples.
‘The student housing asset class has been maturing to a stage of transparency, returns and liquidity that offer sufficient security and confidence for many private and institutional investors,’ said Samuel Vetrak, CEO of BONARD.
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