Savills signals opportunities in Italian student housing market

Student housing is emerging as an attractive alternative property investment opportunity in Italy, according to UK-based advisory firm Savills. Private investor involvement in the sector is still very limited, noted Marcus Roberts, head of Savills student investment at Savills. 'Therefore we expect yields to remain attractive compared to the other sectors in the market.'

In a new report, Savills concludes that prime yields for student housing currently stand at approximately 7% and expects them to remain stable. In terms of occupiers, the survey shows considerable variation in room prices depending on location and the type of premises, ranging from EUR 60 to EUR 1,100 per bed per month. The average comes to EUR 270 per bed per month.

Overall, 65% of Italy’s student halls are located across Lombardy, Emilia Romagna, Tuscany and Piedmont, where almost 40% of Italy’s students are concentrated.

International students are also providing a major boost to the sector, the survey found. The number of foreign students in Italy has grown by 121% over the past decade with more than half of new international students arriving from non-Euro countries, including 20% from Asia.

The firm estimates that about 50,000 student beds are currently managed by the universities (7%), regional authorities (80%) and private colleges (10%). This supply reflects an average student housing provision rate of 3% and satisfies less than three-quarters of demand from intra-regional and foreign students, Eri Mitsostergiou, Savills European research director, said: 'The development and ownership of assets is mainly in the hands of universities and regional authorities but we do not expect any significant new supply to come from the public sector in the near future, creating an opportunity for national and international investors and developers.'