International education is increasingly conducted in the English language. English-speaking nations also tend to contain some of the world’s most sophisticated and transparent real-estate markets which are internationally invested. It is not surprising then that the business of providing purpose-built, professionally rented student accommodation has become a significant business in the US and is maturing fast in the UK.

Student housing has the potential to become a significant and established asset class because of the enduring nature of the institutions that it serves. Student housing produces reliable rental income flows which, although derived from short tenancies, is secured by depth and stability of demand, often matched by low levels of competing supply. This also makes student housing a natural subject for securitisation, increasingly in the form of REITs.

In this report, we take a global view of this emerging, but fast growing asset class. It examines the underlying demand patterns that arise from the international movement of students from country to country and how this is set to grow in the future. It demonstrates how, in many countries, this demand is met by low levels of supply and immature markets.

While growth in student numbers has been significant during the last decade and recession, even lower rates of growth will still enlarge the market significantly, as will the potential for the markets to mature and supply to become more sophisticated. There is still significant scope for growth of this sector and for new entrants in it.

This report provides some pointers as to where these high-performing markets might be and indicates in what direction they might mature in coming decades.

Taken from
Spotlight: World Student Housing 2014