12 Feb 2020 | SÃO PAULO, Brazil – A first-of-its-kind student housing market report on Latin America was unveiled in São Paulo by BONARD, an independent research firm specializing in global student housing.
The event brought together almost 70 people from industry and media to present data essential for strategic decision-making on the emerging student housing market in Argentina and Brazil. The study used secondary and in-person primary research in Buenos Aires, São Paulo, and Rio de Janeiro in 2018 and 2019 to gather data, with the cooperation of Casa Campus as a top partner.
“The first PBSAs and portfolios are on the map. However, reliable data remains limited, as do platforms aimed at the professionalization of the sector. Our goal has always been to supply the consistent, accurate, and reliable data on global basis, incl. Latin America,” says Samuel Vetrak, CEO of BONARD.
“This report will be among the most powerful tools for use by companies like ours, seeking to lead the revolution in student and corporate housing in Latin America,” adds Juan P. Mora, CEO and Founding Partner of Casa Campus.
With over 500,000 higher education students in Buenos Aires and almost a million in São Paulo and Rio de Janeiro, Latin America’s student housing market is in its formation years. Lack of university engagement in housing provision alongside complicated rental rules on the residential market creates an unmet demand for affordable student accommodation.
Growth of demand in Buenos Aires and its position vs. selected European cities; SOURCE: BONARD, 2020
The largest demand comes from domestic and intra-regional student mobility: 80,766 international students in Buenos Aires; 90,000 upper-/middle-class domestic mobile students in Brazil (centered on São Paulo and Rio de Janeiro), plus 6,410 internationals potentially needing such accommodation per year.
The sector is fragmented. Private companies and individual operators run establishments with up to 50 beds and basic amenities, currently offering just under 3,000 beds. This is a strong undersupply compared to market averages of 11% in continental Europe and 30% across 25 selected UK cities.
Moreover, average monthly rent for a single studio in São Paulo and Buenos Aires has remained over 500 USD for two years – considerably higher than private rentals in the emerging CEE markets.
Map of PBSA supply and pipeline in São Paulo; SOURCE: BONARD, 2020
When it comes customer preferences, students see a communal kitchen, laundry, and restaurant as necessary, and nearby leisure facilities, such as a gym, lounge, or games room, as desirable.
Student accommodation in Brazil and Argentina blends with co-living, including private upscale products offering en suite rooms, studios, and apartments located downtown or near universities. Unlike the U.S. model, it lacks university involvement and uses flexible contracts.
The Latin American PBSA market has relatively few companies developing – just 4,748 beds across the three cities. Casa Campus, Uliving, Share Student Living, and Kasa are major brands, supported by developers including Mitre, VBI Real Estate, Grosvenor, Gamaro, Redstone, and Prolifico. However, market saturation is not expected in the coming decade, with competition emerging at a micro-location, rather than a city/national, level.
Comparison of existing supply, pipeline and provision rates with selected European cities; SOURCE: BONARD, 2020
With increasing domestic and intra-regional student mobility, an increasing student population, and a limited pipeline of PBSA projects, Latin America is a market ready for expansion, with great potential for investment and development in upcoming years.
“In the next 3 years, it is expected that Latin America will experience the same developments as other markets from their 4th year onwards – more data and transparency, more awareness, authorities such as universities or city halls being more familiar and confident, all resulting in more data-driven investments,” says Vetrak.
Moreover, yields in the region are currently higher than interest rates, which creates attractive investment opportunities in alternative asset classes such as real estate. As student housing generates even higher yields than traditional real estate, it is quickly becoming an especially enticing prospect.
“With all the requisite data and advisory expertise, BONARD is positioned to be the go-to address for international and domestic investors wishing to enter or expand in this asset class and region,” concludes CEO Samuel Vetrak.
Student Housing Market Report Latin America 2020 can be requested at www.bonard.com/latam.
The graph shows student preferences on PBSA services, amenities and facilities as collected in dedicated student survey taken in a selected Brazilian city in 2019
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BONARD is a market research and advisory firm assisting with data, strategies, and assessments in the student housing sector.
The team of 50 researchers and analysts operating in four offices around the world provide the highest level of secondary and primary in-field data (street-level/ground interviews), making BONARD a leading provider of independent and reliable student housing, micro living, co-living, and other alternative residential data and research.
The company provides up to 250+ KPIs per city as well as data such as demand, supply, portfolios, prices, pipeline, or customer preferences, and monitors 8 million mobile students, 1 million beds, and 5,600 PBSAs in over 100 cities.
BONARD works with over 50 global real estate funds, investors, developers, and operators for which it has delivered numerous country-, city- and site-level reports, including student surveys and customer preferences in terms of location, pricing, services, and amenities based on the collection of in-field street-level data by the company’s mobile units.
BONARD is a UNWTO Affiliate Member and a long-term partner of The Class of 2020. The company’s senior researchers are also individual members of ESOMAR, the world’s leading association of professional researchers.