Prospects for the student housing sector have improved in the last few months, experts agreed at Real Asset Media’s European Outlook: Student Housing investment briefing, which took place online yesterday.
‘I feel much more positive now than I felt back in March,’ said Luke Nolan, Founder & CEO, student.com. ‘Bookings are strong across the board, at around 80-85% of the original target, which is significantly better than we expected, but we are concerned about cancellations’.
A few months ago, with lockdowns in place and blanket travel restrictions across the globe, prospects looked bleak. Now there are grounds for cautious optimism, especially if there is a vaccine and provided there is no second wave of infections.
‘Our extensive research shows that the sector’s fundamentals are all still in place,’ said Samuel Vetrak, CEO, Bonard. ‘International students want to resume or start their studies, the problem is not lack of demand but rather difficulties travelling or visa restrictions’.
Universities have reacted swiftly to the pandemic and it is expected that, just as they closed down their campuses before governments imposed the lockdown, they will resume lessons before the economy returns to normal. In the short term there are likely to be more domestic students, but international students will return as soon as they are able.
The investment market has also shown its belief in the sector.
‘There have been no divestments, which shows that the counter-cyclical, defensive nature of the sector is playing well with investors,’ said Vetrak. ‘Two-thirds of stakeholders continue to seek opportunities and pipeline projects continue as scheduled, with over 80% on time’.
The sense of optimism seems to be shared by market experts. The results of a snap poll done by Real Asset Media show that 69% of respondents feel more positive about the student housing sector than they did in March, with only 31% saying their outlook has not changed since then.
The historical perspective confirms this. ‘Clearly mobility restrictions and social distancing are negative for student housing, but the long-term trends remain positive,’ said Vetrak. ‘We have seen a consistent pattern of the number of students increasing after every recession, from the oil crisis in the 1970’s onwards. In Germany, which is an interesting case study, the strongest ever increase was recorded in 2009, just after the GFC’.