Already seen as one of the more resilient asset classes in real estate, as demonstrated during the financial crisis in 2008, the student accommodation sector is having its time in the limelight with investment into the sector across Europe up by 250 per cent between 2018 and 2019, according to our latest research.

With the number of international students expected to rise exponentially from 5,000,000 (2020) to 8,000,000 in 2025 and a predicted £25 billion of institutional money available to invest, where are the investment opportunities across the continent and how is increasing student mobility having an effect on supply and demand?

In a truly global age, universities have seen no let-up in the level of international talent which they have attracted. The number of international students has grown by 65 per cent in the last decade, undoubtedly fuelling demand not only for a higher provision of student accommodation but also for a higher quality product.

Unlike the UK, where it is almost a rite of passage to live in a basic shared house for a year, for students in Europe (especially in countries such as France, Spain and Italy) the psyche is completely different. It‘s always been the norm to attend a university in your home town and continue living at home. Nevertheless, as mobility increases and students want to capture the best education as possible, we are seeing this change.

Similarly, in the south of the continent, university attendance was traditionally seen as more of a commodity. It’s only been in the last 15 years or so that universities have realised that it should be seen as more of a competitive advantage for the region by increasing the quality of the offering.

As the higher number of overseas students who demand a hotel-esque experience has increased in the UK, providers of student accommodation have had to up their game, incorporating not only comfortable living quarters but also a range of amenities such as gyms, bars and cinemas to create a sense of place and community.

It’s therefore no surprise that the student accommodation sector has seen growing levels of investment over the last decade. The competition to attract the very best talent in an increasingly entrepreneurial world has ramped up and by offering a better product, universities are able to provide the whole package by promoting community living alongside the lifestyle and culture that students are looking for.

So what’s next? While the UK will always remain a popular student hotspot, demand from overseas for top quality education is only expected to rise; China and India in particular are expected to fuel this. As for investor opportunities, the market is still relatively nascent across Europe and, with the right active asset management attitude where service and experience are everything, we can expect to see plenty of activity in the coming years.

Further information

Read more: Market in Minutes: European Student Housing Investment

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