Spotlight: Global Student Housing Investment

Global investment volumes dipped slightly in 2018, but remain high by historical levels at over $17bn

Global student housing investment

Global investment into student housing totalled $17.1bn in 2018, the third year in a row that volumes exceeded $16bn. While down 2% on 2017, total volumes are still up 425% since 2008 (all global real estate volumes rose by 130% over the same period). Provisional Q1 2019 data shows a further $2.4bn invested in the sector globally, with notable transactions from Brookfield, Greystar, PSP Investments, and Allianz.

Volumes in the UK and Western European were down in 2018 as fewer major portfolios came to market (falling 33% and 38% respectively), but the US reached an all-time high with $10.8bn invested into the sector.

Figure 1

Global student housing investment volumes
Source: Savills Research using RCA

In numbers

  • For the third year in a row, global student housing investment volumes exceeded $16bn in 2018. Marginally down on 2017, volumes are still some 425% above where they were a decade ago.
  • A record $10.8bn was invested into student housing in the US last year, driven by some exceptionally large deals, including Greystar’s acquisition of EdR.
  • Student housing yields average 4.8% across 15 key national markets, 370 bps above bonds. They range from 6.0% in Australia (4.11% net of bonds) to 3.7% in Germany (3.70% net of bonds).
  • Provision at the national level ranges from 34% in the UK, a relatively well supplied market, to 10% in Australia.
  • International students are an important source of demand and the US, UK and Australia have the highest number of them. Australia’s international student population has increased 41% between 2012 and 2017.
  • Between 2007 and 2017 the number of internationally mobile students grew by 64% to over five million, according to UNESCO. They are forecast to reach eight million by 2025.

All $ figures refer to US Dollar

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