The investment volume rose from € 79 million in 2019, to over € 211 million in 2020, an increase of 62 percent. Some of the striking deals of the last year have included the purchase of ‘t Bassin in Maastricht by Catella and the more recent purchases of Tower in Groningen by XIOR and Rock Living in Utrecht by Greystar, both sold by KKR / Round Hill Capital. These investments were made at historically low initial yields for this type of product, narrowing the gap between student housing en regular housing, confirming that the investment market for student housing is maturing.

Bas Wilberts, Head of Residential & Hotel Investments, says: “The increasing growth is only partially visible in the investment volumes, which is the result of the fact that the market remains modest in size and only a limited amount of product becomes available on the market. In addition, many developments are held in portfolios by investor developers after completion and are not or only partially included in the total investment volumes. In addition, the price of the product is determined by the quality of the building and the exploitation possibilities.”

However, increased interest is also demonstrated by the number of investors who have launched funds in recent years for the purpose of (potentially) purchasing student housing projects. These types of funds are often not only aimed at student housing but also at affordable housing in the bigger cities. Investors who have launched so-called micro-living funds, include Aberdeen Standard, AXA, Union Investment and Commerz Real.”

Contrary to what might be expected, travel restrictions caused by Covid-19 are virtually not affecting international student enrolment in the short term, a slight increase of 1% in the total number of foreign students is even expected this academic year. However, there are currently still a lot of international students enrolled at Dutch institutes of higher education who are completing their studies at home. In the first semester of this academic year this meant that fewer student rooms were being rented by international students. However, a survey among various student housing operators has shown that occupation rates have remained mostly stable. The most important reason for this is an increase in the demand for student housing from Dutch students and young professionals.

Jordy Kleemans, Head of Research & Consultancy at Savills in the Netherlands, says: “The Dutch student housing sector is facing structural shortages. The current nationwide shortage amounts to over 17,300 units. Although 13,000 units are expected to be added in 34 projects in the next five years, the national shortage as a result of the growing (international) student population in the Netherlands is expected to rise to 32,000 homes by the 2026-2027 academic year.”

Bas Wilberts adds: “In many cities, the supply currently mainly consists of separate rooms with shared facilities. Due to the internationalisation of student populations there is an increasing need for a more varied supply, purpose-built student accommodations (PBSAs) for this target group, with the right addititional services.”