With a combined student population of 20 million, growing international enrolment and very low provision of purpose built accommodation, Europe offers investment potential. With the US and UK markets now mature, investors are seeking opportunities across the region.
Investors are now seeking opportunities across Europe
FIGURE 12Student populations in Europe and markets in brief
Source: UNESCO, Savills World Research
The number of higher education students in Ireland has grown rapidly in the last decade and underlying demographic trends are positive: the number of 15-29 year olds are forecast to grow by 29% in the next ten years. Student accommodation is provided mainly by universities and provision rates are low. This, together with the presence of quality institutions has attracted private operators to Ireland, first to Dublin. Ziggurat Student Living and The Student Housing Company are international operators with a presence in the Irish capital.
Overall enrolments are falling, but international student demand has doubled in Spain in the last decade in a country particularly attractive to foreign Spanish-speaking students. Student housing stock is provided mainly by universities along with providers RESA, Residencia Campus and Campus Patrimonial. British company Knightsbridge has expanded in Spain with projects in Madrid and Barcelona. Spain is benefiting from increased international investment across all real estate sectors as its economy sees recovery.
Portugal is attractive to international students from Portuguese speaking nations: students from Brazil are the largest foreign group. The country’s student housing sector is relatively undeveloped. Major universities provide a small amount of their own accommodation via their social services providers, while a domestic private provider offers properties in Lisbon and Porto. Competition comes from affordable open market rentals.
Austria has a student population of 376,000, having grown by 54% between 2005/06 and 2014/15, among the highest rates in Europe. Although 15% of the student population are international, many of them are from bordering countries. Student accommodation is rarely provided by the universities directly; students have the choice of finding accommodation through student housing companies or in the private rental market. Milestone Student Living is an early private entrant, successfully targeting the premium segment in Vienna and Graz.
France has the second largest higher education sector in Europe, while Paris is ranked the number one student city in the world by QS. Some 58% of accommodation is provided by the public student body CROUS. The market is undersupplied but provision is growing, fuelled by domestic operators and further supply pipeline from CROUS. The market offers potential but investment activity has been driven by domestic investors to date. Between 60% and 70% of stock is sold to private investors in strata title.
Purpose-built student accommodation in Italy is typically provided by the university, although some 75% of students live at home during study. Supply is lowest in Rome, while the highest rents can be found in Milan. Italy has yet to experience any significant institutional investment in its student housing market. One fund, Fondo Aristotele, focuses on investments including social housing, university development, senior housing, as well as student accommodation, with properties across the country.
See Netherlands and Germany on Country Comparison