Student housing: Europe will emerge as a winner

The impact of the Corona virus epidemic on the student housing sector will vary significantly between countries, delegates heard at Real Asset Media’s European Outlook: Student Housing investment briefing, which was held online recently.

‘From a global perspective we’ll see shifts in destinations and Canada and Europe will emerge as the biggest winners,’ said Samuel Vetrak, CEO, Bonard. ‘Canada will benefit from the decline in the US, while within Europe the UK, Germany, France and Poland will remain strong, Spain will regain its position and Italy will keep rising up the ranks’.

The US has been badly hit by coronavirus and uncertainty over prospects for the next academic year, while its embassies and consulates around the world remain closed which make visa applications difficult.

‘Globally it’s a mixed bag of news but Europe is having a really positive time compared to the US or Australia,’ said Luke Nolan, Founder & CEO, student.com. In Australia, which is more dependent on foreign students than the US, the virus hit at the worst time, wiping out two consecutive terms.

‘In Germany, the PBSA market is very resilient,’ said Lambros Reppas, Asset Management, Micro Living & Residential, CORESTATE Capital Group. ‘In our properties, we usually have 98% occupancy rates and they have gone down to 94%, so there hasn’t been a significant impact.’

The fact that Germany has dealt well with Covid-19 helped. ‘I believe it still makes sense to invest in Germany, but it’s an expensive market and returns are low,’ Reppas said. ‘Poland is more affordable and it’s a good place to invest now across the board, from student housing to co-living to services apartments.’

Poland is on more investors’ radar screens now because of a combination of safety, scale and affordability of rent, as well as Universities’ proactive stance in improving their offer and attracting foreign students.

‘There is strong interest in Poland because it’s like Ireland five years ago: rents are lower than in other European cities and yields are still high,’ said Vetrak.

The search for opportunities continues. ‘We’re looking at many new markets, like France which is very interesting,’ said Rob Waterhouse, Head of Transactions, Global Student Accommodation. ‘As for the UK, we believe that the decline in the number of Chinese students will be offset by an increase in domestic students and the market will prove to be resilient.’

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