Competition for international students:

While international student numbers continue to rise globally, competition for them has never been greater. The UK has announced a strategy to boost numbers by 30% over the next decade, supported by post-study visa extensions of up to a year for international students to find work. This still falls short of the 18 month extensions offered by the US and Australia.

Opportunity in the middle tier:

To date developers and investors have focused on the premium end of the market. There exists significant potential in serving the middle tier between low-quality university stock and new premium product. Partnerships with universities or social providers to upgrade existing properties may be means to achieve this.

Beyond students:

The co-living model mixes students with other occupiers. This broadens the demand base as well as supporting a wider range of services and amenities, in turn enhancing the appeal to occupiers. We anticipate further hybridisation and merging of the residential asset classes to come.

Investment outlook:

An impediment to expansion of the sector to date has been relatively restricted operating platforms, but this is changing as they mature and expand their capabilities, giving comfort to core investors.

We expect to see continued portfolio diversification among major investors in student housing to include the whole spectrum of residential assets (multifamily, co-living, senior housing), as greater efficiencies through shared-management platforms are sought.

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