Purpose Built Student Accommodation (PBSA) has moved out of the shadow of “alternative” real estate, and is forming a key component of investor allocations to operational real estate across the globe. Driven by its defensive characteristics i.e. not correlated to wider economic movements, as well as compelling demand and supply imbalances, demand for student accommodation investments across European educational hubs has grown substantially in the last few years.
We now live in a world where the student population is more internationally mobile, more flexible and ultimately has more choice in what and how they study, and as a result customer demand for student accommodation shows no signs of abating any time soon.
According to Oxford University, the Global Tertiary Enrolment Ratio (share of student age population at university) increased from 14% to 32% in the 20 years to 2012 and shows no sign of slowing down, especially amongst developing countries. India, as an example, had 14 million students in higher education in 2007, 28 million in 2013, and is forecast to reach 119 million by 2025.
Nevertheless, developing purpose built student accommodation in growing markets is not simply a case of ‘build and they will come’. Politics, cultural norms and family traditions are some of the factors that will heavily influence the demand pool for new developments and determine the best type of product to construct. Fundamentally more immature markets will need time to understand, accept and adapt to a new way of living.
This guide is intended to highlight some of the European markets where we are seeing increasing opportunities for growth in the student accommodation sector.
Source: Cushman & Wakefield