The strong growth of international students in Europe is turning student housing into one of the most attractive niches of the alternative real estate asset classes.
‘International students are the future,’ Samuel Vetrak, CEO of StudentMarketing, told a recent PropertyEU Investment Briefing in London. ‘The numbers of domestic students are decreasing, due to demographic trends, but that decline is more than compensated by the increase in foreign students targeting continental Europe,’ he told a packed room at the London offices of law firm Nabarro.
By 2020 there will be an additional 335,000 international university students in continental Europe, plus an additional 310,000 short-term exchange students on Erasmus-type courses moving to over 40 competing destinations, research from StudentMarketing shows.
Vetrak claims that investments of €2 bn a year are needed to attract these students as housing is a necessity and an integral part of the value proposition. Moreover, demand already far exceeds supply.
In Europe the UK has led the way in student housing and it remains the largest, most mature and most liquid market with institutional investors like GIC, Singapore’s $100 bn (€89 bn) sovereign wealth fund, and Canadian pension giant CPPIB, forking out significant sums to bolster local platforms Unite and Liberty Living. A week ago, Unite teamed up again with the Singaporeans to acquire a major residential campus in Birmingham for £227 mln (€266 mln).
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