Education is becoming increasingly globalised, and the world's student population ever more mobile, but the way in which different countries house their student populations differs widely, particularly across Europe.
Student accommodation tends to take one of three forms: purpose-built student housing (PBSH); other accommodation – usually a house/flat rented from the private sector; or living at home with family. In the UK, the majority of students either live in halls of residence (18 per cent) or in private accommodation (59 per cent) – usually a student house share, with the remaining 24 per cent living at home.
In the Netherlands, the proportion of students in PBSH is higher, accounting for 29 per cent of students while in Sweden it is 28 per cent. In other markets the private rented sector plays a more dominant role: in Denmark, according to figures from Eurostudent, 83 per cent of students are in other accommodation, with only 6 per cent living at home with parents. This situation is reversed in Italy where staying with the folks is the norm, practised by 75 per cent of the student population.
This poses opportunities but also challenges for student housing developers. In most European markets there is a need for more PBSH, driven by increasing volumes of international students who are looking for a home from home which they can move into lock, stock and barrel, and pay a set fee for without worrying about extra bills or management issues.
Developing PBSH would therefore appear to be a no-brainer. But local markets can be fickle: the supply pipeline in many areas lacks transparency, and cultural challenges must be considered – in Germany, for instance, most students prefer to live in their own studio apartment, which is very different from the UK model which tends to favour en-suite bedrooms clustered around a communal kitchen. Moreover, much of the PBSH delivered across all markets to date is at the premium end of the market, while future demand is likely to be for a more affordable product.
Providing this will be prohibitive in some locations, particularly in places such as London and Paris where high land prices are a barrier to entry, with the development of other asset classes often proving more attractive. The most successful investors and developers may therefore look to spread the risk by looking at hybrid products (where planning laws allow), which combine PBSH with hotel-type accommodation or apartments rented on the open market, targeted at young professionals.
Student accommodation by type in Europe:
Read more: Savills World Student Housing Report