• Student Housing is already a well-established asset class in the UK and US, and has been a beneficiary of the general ‘flight to quality’ among property investors in the last five years. Student housing offers exposure to a residential asset class, but without the attendant implications of direct ownership. For income-seeking investors, student housing delivers secure income in uncertain economic times.

• As the student housing market matures in established markets such as the UK and the US, investors are turning to mainland Europe for new opportunities. The fundamentals of the European market are solid: Europe is one of the biggest recipients of international students and domestic enrolment is growing as young people seek to improve their employability in a challenging economic environment.

• The European market is a diverse one and our findings indicate that investment choices must not be made at a national level. Different locations can have very different prospects within the same country. Investor focus needs to be concentrated on cities themselves and their higher education institutions in particular.

• There are challenges: the propensity for European students to live at home during studies in countries like Spain and Italy is high. In much of mainland Europe, the private rented sector is already well geared to accommodate students and, in some cases, organisations are in place to act as intermediary between student and private landlord.

• With global student mobility increasing, and European institutions actively recruiting more non-EU students, purpose-built student accommodation comes into its own. Private student housing operators providing a one-stop-shop for secure, quality accommodation, may find themselves with a commercial edge.

• Our findings suggest the greatest opportunities lie in established student cities such as Paris, Milan, Barcelona and Amsterdam. Germany, characterised by relatively affordable student accommodation, still offers potential in higher value cities such as Darmstadt, for example. Zurich and Lausanne also pose strong opportunities, as does Utrecht in the Netherlands – albeit student populations are smaller. Meanwhile, the focus of investor activity in the UK to date has not been misguided; many UK cities still hit the investor sweet spot.

Taken from
Spotlight: European Student Housing