Student housing investors and developers need to rethink the product to create something more sustainable , that reduces energy costs and the inflationary pressure on rents, says NREP investment director Anne Sofie Vett Raaschou.
“The need for us all, as the players of the industry and as developers, is to go back to the drawing board and create a new product,” she said.
Vett Raaschou said that there is still a structural undersupply of student housing and for developers there is a perfect storm. “We have tremendously high construction costs, we have very high financing cost, very high volatility of financing costs as well and exit values are under pressure.”
She said this has halted new construction activity which is obviously not improving the supply of student housing.
The consequence of not acting will be rents spiralling out of control. “As industry players we have a societal responsibility to create affordable and sustainable products for students,” she said.