A new study released by student housing research specialist StudentMarketing suggests that student accommodation is a 'crisis-resilient' asset class, now ranked fourth in terms of development and investment goals by over 200 investment managers.
According to the data, student housing now counts over 500 investors, managers, developers and operators in Europe, with annual transactions at around €10bn in 2018. Yields continue to outperform mainstream asset classes by a significant margin (100 to 250 bsp).
Demand continues to heavily outstrip student housing supply, with beds available on average for only 15% of the students in continental Europe. Strong and growing demand sees most student houses record close-to 100% occupancies, the report adds.
Amongst a growing number of international students, most demand is for modern competitive private purpose-built student accommodation (PBSA) with rich communal areas and amenities. Students are willing to pay from €473 (Budapest) to €1,300 (Milan) per month for a private single studio, on average €610 across Europe.
Over 350 new private PBSA projects with 105,000 beds are in the pipeline to come to the market in next two years with a value of €15bn, the report says, concluding that this will still not be enough to meet demand.
It notes that student numbers tend not to decrease in economic downturns, remaining matters of non-deferable commitment, which are likely to benefit from increasing investment allocations in the coming years.