The latest Bonard Student Housing Annual Report suggests that the global purpose-build student accommodation (PBSA) sector is stronger than ever, despite the challenges of the last quarter of 2022.
The report, profiling data, trends and transactions for the past 12 months, shows that occupancy rates and rents are still rising.
The latest edition of the PBSA snapshot has expanded its criteria to track occupancy rates, rent levels, transactions, yields, construction pipelines and other key data points in the market across Europe, Australia, Canada and LATAM.
The new topics added in this year’s edition include room size comparison to rent levels, rent series, and portfolio structure.
Challenges and opportunities
While soaring inflation, interest rates and rising costs in the last quarter of 2022 have slowed down investment transactions, the overall outlook is positive and experts expect the sector to keep growing in the next two years.
Growth will be driven by increased demand, especially from international students – and in some locations, supply will actually struggle to keep up with demand. According to the report, occupancy rates hovered between 95 to 99% in Europe, while the average rent for a studio has reached €946 a month.
Porto, Barcelona and Seville top the charts for the biggest construction pipeline, while Greater London and Greater Paris have the highest number of projects under construction.
Bonard CEO Samuel Vetrak said: 'The PBSA sector was affected in 2022 by the macroeconomic conditions, but less so than other asset classes.
'In 2023, we can see even greater institutional capital demand for this asset class. Q4 2022 was a transition and adaptation quarter. Still, occupancy is high and rents are growing – in some countries 20% or 30% more than the year before.
'On the other hand, interest rates are expected to keep increasing slightly in 2023. And while development costs have stabilised, what has not changed is the cost of land. Some investors are waiting for a correction on that front.'
Expert views
The report was presented by Martin Varga, real estate business development director at Bonard. The webinar welcomed over 1,000 participants from around the world.
The presentation was followed by a panel of industry experts chaired by Vetrak. Josh Miller, managing director, head of transactions – Europe at Harrison Street, Rob Waterhouse, transaction director at GSA, Marc Sampietro, living operations director at aparto and Jochem van den Broek, head of banking at The Social Hub, joined the panel.
