In our latest edition of the BONARD Blog Series focused on private purpose-built student accommodation (PBSA) market, we look at what differentiates premium from average products in terms of brand with a focus on the UK and continental Europe.
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Product composition must take account of local market trends in line with prospective tenants’ needs if further PBSA development is to occur
Amenities offered in Tier 1 cities
Our research showed that, in regard to common areas and facilities in private properties, there are five main difference makers across the major university cities (Tier 1) of Europe and the UK: the presence of gyms (accounting for an almost 20% difference between products), study rooms (15%), TV rooms (20%), games rooms (15%) and terraces (15%). None of these facilities exist in the average rented property marketed at an average price. Turning to the amenities offered by both premium and average products, BONARD identified that laundry rooms (90% share in both), multifunctional rooms (70%), bike storage (60%) and communal kitchens (50%) made the difference.
Amenities offered in Tier 2 cities
The product quality difference is greater in Tier 2 than in Tier 1 cities, where market demand is more driven by competition. In Tier 2 and smaller cities, local developers often work in a different style and with an eye to different client needs to those identified in the more developed markets catered to by Tier 1 providers. Difference makers in smaller cities include gyms (15%), study rooms (15%), communal kitchens (15%) and terraces (20%). Smaller assets generally feature multifunctional rooms encompassing games and cinema facilities in a single space.
Amenities offered per selected cities
A closer look at the 8,800 PBSA properties and over 200 portfolios monitored by BONARD highlights a comparison of cities and amenities, giving a better understanding of how these amenities are distributed regionally and the market differences between continental Europe and the UK. The study room is a type of common room which private providers frequently do not offer, in particular in Amsterdam and Paris (30% of providers in both cities) or Toulouse (less than 30%); in Barcelona, Berlin and Madrid, in contrast, it is offered by 100% of providers. French student housing providers do not typically offer a games room (20%), whereas it is a strong part of the product in the UK and Spain (100% of providers offer it in Edinburgh and Madrid).
Communal kitchens appear in 100% of the Edinburgh and Vienna private PBSA but are almost non-existent in Madrid, Paris and Toulouse (10% of providers in each), while the presence of a gym is pretty balanced across all cities considered, except for Amsterdam (40% of providers), Edinburgh (30%) and Toulouse (30%). Bars and clubs in a private student residence are a more recent phenomenon; hence, they are more usually present in new/er properties, especially in the Spanish market – Barcelona and Madrid (around 70% of providers in both cities) – and less in other European markets.
Services included – or not – in the rent
The research also showed which services are included in the rent packages of properties across Europe and which are charged as extras. In some cities, such as Milan (70% of properties), Barcelona (over 60%) and Madrid (60%), cleaning is standard. In most cities, however, it is not included in the package. Internet is included in almost all properties. Monthly or more frequent bed linen change is not usually offered, being restricted to a few cities in Spain (Barcelona – 20% of properties and Madrid – over 40%) and Italy (Milan – almost 60%). Full board as part of the package is also mostly offered in the Spanish and Italian markets. In fact, the meal plan offer is the most typical difference among PBSA residences across Europe. Private residences in Italy and Spain usually offer meal plans as an obligatory element of the accommodation, which makes the accommodation price higher. In the rest of continental Europe and the UK, non-private and religious establishments typically offer meal plans as an optional service or do not offer them at all.
Quality product is essential
Our research as well as (in-field) market experience indicates that product composition must take account of local market trends in line with prospective tenants’ needs if further PBSA development is to occur.
With a growing supply, competitiveness will not only be rooted in the rent price, but also in a well-established quality product. This has to be taken into consideration not only as regards new developments but also assets due for retrofitting.
Methodology Disclaimer: Only aggregated data from privately-funded projects in selected cities were used.
Head of Research
Head of Rented Residential
Head of Deals & Intelligence Division
In our latest edition of the BONARD Blog Series focused on private purpose-built student accommodation (PBSA) market, we look at the latest developments from Q1 2022 and their impact on Q2 2022.
The second edition of the BONARD Blog Series gives an overview of the student housing pipeline in Europe in 2021 and beyond. For more details or to schedule a complimentary consultation, please contact email@example.com. Over 246,000 private PBSA beds in total are...