The student housing market in the UK became bigger than the huge US market last year, a recipient of $7bn in investment, a sign of how fast it has grown in a few years. But now Germany and other European countries are set to follow in the UK’s footsteps and attract significant investor interest, experts agreed at the PropertyEU Student Housing Investment Briefing at EXPO REAL on Wednesday.
'We think Europe will be the next phase in the story, and as usual private investment is leading the way and will surely be followed by institutional money,' said Yolande Barnes, head of research at Savills, which has just published a global survey on the sector.
Low provision in all markets, rising demand and increased student mobility are all factors that are contributing to growth in the sector, and the attraction for investors is a steady income stream and rental growth. In Germany, the biggest European market after the UK, 'demand is driving rental growth, and furnished apartments are exempt from rental regulations, so student housing rents have grown at a faster rate than other residential,' said Rainer Nonnengasser, CEO of MPC Microliving.
The sector is growing but also evolving, said Felix Bauer, CEO of DREF: 'Student rooms are getting smaller but shared facilities are getting bigger, and buildings need to have a communication system so people can be connected.' Design and service are increasingly important, and fast communication among students will ensure that brands with a good reputation get recognition.
