‘Consolidation ahead for the sector’

The Student Housing sector has seen huge growth over the last few years and the participation of more institutional investors, but it continues to be fragmented. There will be consolidation ahead, according to Samuel Vetrak, CEO of BONARD, research specialists in the sector. 

Of Europe’s current 107 student housing portfolios, 82 have fewer than 5,000 beds.

‘With significant room for consolidation, we expect many transactions this year that will involve both mid-sized and bigger portfolios,’ he said. 

As well as transactional activity in the market, there is a strong pipeline, with significant growth expected in completions this year.

New projects in continental Europe and the UK will bring 338 private PBSA projects (with 130,678 beds) onto the market in the next 2.5 years. A further 320 projects have been announced, representing 91,636 beds, but details have not been disclosed yet.  

London is ahead with a pipeline of 20,000 beds, followed by Lisbon with 12,000 and Porto with 6,500. The Portuguese city has the lowest cost in Europe for a single studio in private PBSA, E416, but it has also recorded the steepest increase in rent (+15% in the last year) due to high demand.

London remains the most expensive city for an international student, with average monthly rents of E1,547 and a +6% increase in the last year. In other European cities rents hover between E618 in Berlin, E698 in Rome,E848 in Barcelona and E934 in Paris.

Based on BONARD’s research into 5,600 PBSAs and data accumulated from

thousands of student surveys, product is increasingly determined by student preference.

The data shows that students prefer amenities, such as communal areas and quality of service over larger and better-equipped rooms.

Laundry rooms, study rooms, communal kitchens, a garden, a gym and a cafeteria are all a must-have for international students. New amenities are becoming more in demand, such as swimming pools, rooftop terraces, bike sharing and co-working areas. 

There is also a strong trend for new services like business incubators, event organizers, student life apps, workshops and residential mentors.

While the UK continues to be the strongest market, continental Europe is booming due to its low provision rates. BONARD research shows that  1 million beds are needed to match the current UK market saturation. 

This gives investors an opportunity to bring new product concepts, such as

Hybrid models or co-living, to under-supplied markets at an earlier stage. This will lead to increased provision of newly-built, purpose-made accommodation under the same roof for students and young professionals in order to exploit the synergies between the two.

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