A growing, internationally-mobile student population has fuelled demand for purpose-built student accommodation in the markets that have been the biggest recipients of these students to date. Private student housing operators provide a one-stop-shop for secure, quality accommodation so have found themselves with a commercial edge in this sub-sector. Many of them have actively tailored their offer to appeal to this market.

International students contribute to a local economy as well as bottom line and diversity of a university. International students typically pay higher fees, spend more on both accommodation and living, and bring new insights and cultural perspectives to a country. This is particularly the case if they stay on to work in the country after graduation and take their newly acquired, but overseas paid-for, skills into local businesses. More institutions, and countries, are recognising this value and are targeting overseas students. This is being done by offering English courses, visas and, importantly, higher quantity and standards of student accommodation.

The examination of sources and trends of these mobile students reveals how some countries are actively seeking more students while others see these student numbers stagnate. Countries that attract international students from all over the world tend to have stronger links for language, cultural or accessibility reasons, as this section will explore.

Global student flows

Enrolment in higher education stands at 164 million students globally, and is forecast to grow by a further 32 million by 2024. Of this, the number of students enrolled in tertiary education abroad reached 3 million in 2011, having grown from 2 million in 2000, according to the latest UIS data. It is forecast to reach 3.9 million by 2024.

China is the biggest source market for internationally mobile higher education students, with around 650,000 students studying abroad. Its domestic student market is also the world’s largest (with more than 31 million students) and has seen the number of students at its own universities double in the last decade. Internationally mobile students from China grew by 89% between 2007 and 2011 alone, and are the biggest foreign student group in the US, UK, Germany, Japan and Australia.

After China, India has the largest number, with 196,000 mobile students, who are particularly prevalent in the US and UK. Canada is increasing its share of overseas students, as it actively seeks to attract them from India with its ‘Student Partners Program’, a direct visa scheme launched in 2011. Students from South Korea are next, with 128,000, who favour Japan and the US.

Large, fast growing source markets include Hong Kong (internationally mobile student numbers up 186% between 2007 and 2011), Thailand (up 136%), Malaysia (108%) and Saudi Arabia (97%). Recession-hit European countries such as Spain also saw a spike in students studying abroad, up 94% between 2007 and 2011.

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New horizons

Turkey has benefited by opening up its student market, doubling the number of international students it hosts between 2005 and 2012. The country benefits from the Erasmus scheme which brings EU students to its universities. Because of its position at the nexus of Europe and Asia, it has also attracted students from Azerbaijan and Turkmenistan, as well as Europeans. The Erasmus scheme is poised to become more significant throughout Europe, with a 40% boost in funding approved between 2014 and 2020, providing opportunities for over 4 million Europeans to study, train, gain work experience and volunteer abroad.

Brazil is another major growth market, now with a larger economy than the UK, it has a rapidly expanding, increasingly outward-looking middle class. To date, the majority of students originating from Brazil go to study in the US, followed by France and Portugal. We believe this market, along with other growing South American nations, is poised to make a much bigger impact on the European markets in the coming decades. This will particularly affect cities in Spain and Portugal with a large number of high ranking institutions, such as Madrid, Barcelona and Lisbon.

Outposts or campuses of well-known universities, especially western ones, achieve two things. First, they enable students from the home market to study in a new country to home standards. Second they enable those in the host country to study at a respected university without having to live abroad. These schemes have met with varying success. In Japan, for example, only Temple University, Japan, remains after several western university outposts set up in the 1980s have closed.

In contrast, Dubai has seen the creation of 21 outposts in the last decade. Student numbers have increased and investment into student accommodation has been managed by DIAC (Dubai International Academic City). Given Japan’s experience, however, this type of investment must be viewed with more caution by investors.

Cost of living

In spite of being by far the most expensive place in which to study globally, the US receives the largest number of foreign students, in excess of 700,000, followed by the UK with more than 400,000. However, the choice for students studying abroad continues to grow, particularly as more institutions offer courses in English, the favoured language of study for most. The very high cost of study in the US, and to a lesser extent the UK, has made other countries look increasingly appealing. Generally though, the lower cost locations tend to be less renowned for their educational institutions.

According to the QS student affordability ranking, Kuala Lumpur, Mexico City and Taipei are the top three most affordable student cities in 2014. From a student housing investment perspective, these cities are very early on the investment curve, but European cities feature too. Berlin and Munich are ranked fourth and fifth respectively, primarily due to the low or zero-cost tuition for both domestic and international students. As explored on p19, Germany is also among Europe’s most under provisioned market for purpose built student accommodation.

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Language matters

Given the importance of the English language to global business and academia in general, more institutions in non-English speaking countries have been offering courses in English in order to improve their international standing. English is the preferred language for scientific research and it is important for all high ranking institutions. Spanish and French are also major languages of study.

The Netherlands was the first European country to move towards English language tuition, and offered the largest number of English taught masters programmes in mainland Europe in 2013. Other European countries have seen their English course offer expand rapidly from a low base.

Sweden and Denmark have recently converted all masters courses to be taught in English, while larger European markets such as France and Germany have also seen rapid expansion in their English teaching offer. This is significant because it is likely to start attracting increased numbers of international students to universities that can do this well.

Further afield, Asian countries have had varying success at attracting international students through the provision of English courses. Japan has introduced a ‘Global 30’ programme offering 364 courses in English which has attracted 21,000 students to date. It aims to attract 300,000 international students by 2020.

South Korea has also increased the number of English courses on offer, primarily to benefit domestic students. Results have been mixed, however, given poor levels of spoken English among native lecturers and domestic students.

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Visas

For most students, a higher education is a route to a better job with improved prospects. Therefore, the attitude towards foreign students after the completion of their education in the host country is of increasing importance. Germany allows students to stay on for an additional 18 months after they have graduated in order to find a job.

In Australia a temporary graduate visa is available to international students on completion of their studies. Government data shows that 15% of visas issued to those who previously held a student visa in Australia were subsequently granted temporary graduate visas in 2012-13.

This raises the question as to whether the student housing model can also be extended in these countries and elsewhere to a ‘graduate housing’ model. This would provide professionally-operated accommodation similar to student housing, perhaps with some shared facilities, for university leavers and first jobbers. In the fast-developing world of student accommodation, new innovations, niches and practices can be expected as the sector matures.

Taken from
Spotlight: World Student Housing 2014