■ Today’s globalised and increasingly mobile student population has changed the face of the global student accommodation sector. Students have ever higher expectations of accommodation, and the private sector has made inroads to supplying it in the most mature markets.

■ It isn’t only the students that are internationally mobile. Capital, too, is flowing across borders as it seeks out new investment opportunities. The US market is now well established, and represents the fullest potential of the global sector. Institutional investors are increasingly important to the UK market, and investors are now seeking opportunities in mainland Europe.

■ We expect private wealth to become increasingly important as a source of international capital in the sector, particularly in less established markets hitherto deemed too risky for institutional money. It also echoes the global search for income, and student housing as an income-producing asset, will come into its own here.

■ The origin of recent waves of student demand tells us much about the likely sources of future demand and the future potential of certain markets. China, already the largest source market for international students, is only going to grow and will likely be aimed at the US, Japan, South Korea and the UK, but will also make increasing inroads into Europe. Brazil is poised to be another major exporter of students, and is poised to make bigger inroads in Portugal.

■ There are risks to the sector. Tuition fees are on the rise globally, as institutions look to secure the funding to stay competitive. In mainland Europe, where tuition fees are currently extremely low, there is increasing talk of tuition fee rises, particularly in those countries hit by austerity.

■ Technology is rapidly revolutionising higher education teaching, with electronic learning rapidly changing the classroom experience. Several institutions have taken this a stage further, offering online-only courses – often for a fraction of the cost of a full-residential based course, or in some cases for free. The uptake of such courses will clearly impact the need for accommodation, although we are still a long way off any structural shifts in the sector.

■ The future of student housing relies on demand from the student population. The number of students across the globe is forecast to increase by an additional 32 million by 2024. International students are also forecast to increase in number rising from 3 million in 2011 to 3.9 million in 2024.

■ Whether or not this materialises there is sufficient shortfall in many university cities to justify significant further investment. Growth in student numbers will be ‘icing on the cake’. Growing international student numbers will secure the market for premium product.

Taken from
Spotlight: World Student Housing 2014