Spotlight: World Student Housing – 2017/18 – Savills

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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.

utrecht university student housing

▲ Student housing at Utrecht University



■ 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


■ 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


■ 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